Microsoft's search and ad sales, now with LinkedIn, gain 10% to $6.6bn

Microsoft reported on October 28, 2026 that revenue from its Search and advertising business rose 10% to $6.55bn in the three months to September 30, the first quarter in which that line combines LinkedIn's advertising and Premium subscription businesses with Bing, Microsoft Edge and MSN. The new grouping, one of several introduced with a two-segment structure Microsoft announced in September, means the company no longer publishes a growth rate for search advertising on its own.

The rest of the quarter was dominated by infrastructure. Total revenue reached $92.3bn, up 19%, and operating income climbed 21% to $45.9bn, according to the earnings release. Azure revenue grew 48%. Capital expenditures, including finance leases, came to $45.2bn, and the 10-Q filed the same day shows $364.6bn of datacenter and other leases signed but not yet started. The filing also shows that commercial arrangements with OpenAI produced $10.0bn of revenue in the quarter, close to 11% of the company's sales.

In Short

Microsoft earned more from ads between July and September than a year before, but it now adds LinkedIn's ads and paid memberships to the same pile as Bing, so the 10% rise cannot be lined up against the Bing numbers it used to publish. That matters to anyone who buys ads on Bing or LinkedIn, because the company has stopped saying how fast search ads alone are growing. Microsoft expects growth in the low double digits again for October to December, while it keeps spending more than $45bn a quarter on data centers and chips.

A new line for advertisers to read

Until June, Microsoft reported search revenue under a metric it called search and news advertising, later shortened to search advertising, and tracked LinkedIn as a separate business. That ended with fiscal 2027. According to the 10-Q, Microsoft in September 2026 "announced changes in our segment reporting structure," creating an Agents and Infra segment that "brings together our applications and agents, our multi-model system, and Azure infrastructure," and a Devices and Consumer segment covering its consumer products.

The search line moved with it. In the 10-Q, the Search and advertising product line now covers "Bing, Microsoft Edge, LinkedIn Marketing Solutions and Premium Subscriptions, third-party affiliates, and MSN." The investor metric that matters most to search marketers, revenue excluding traffic acquisition costs, has been redefined in the same way. It now measures revenue "from search advertising excluding traffic acquisition costs" paid to Bing Ads network publishers and content partners, "as well as revenue from LinkedIn Marketing Solutions (ex TAC) and Premium Subscriptions," according to the filing.

LinkedIn itself has been divided. Its Talent Solutions and Sales Solutions businesses now sit inside a new Industry solutions cloud metric, alongside Dynamics 365 and Healthcare and Life Sciences cloud, in the Agents and Infra segment. Its advertising and consumer subscription revenue sits in Devices and Consumer. LinkedIn as a whole no longer has a reported revenue figure.

The effect on the numbers is large. Under the old definition, Microsoft's fiscal 2026 search advertising revenue was $15.18bn, up from $13.88bn the year before. The recast Search and advertising line in Microsoft's financial statements puts fiscal 2026 at $24.84bn. The difference, $9.66bn by PPC Land's calculation, approximates what moved into the line. Microsoft does not break it down.

Growth rates shift too. Microsoft's spreadsheets restate the last four quarters on the new basis, in both reported and constant currency terms, and in three of them the new metric runs higher than the figure first reported.

The first-reported figures come from PPC Land's coverage of each quarter: 16% in the September 2025 quarter, 10% in December, 12% in March and 10% in June. On the recast basis, the June quarter grew 13% rather than 10%. Read against the old series, the 12% reported on October 28 looks like an acceleration. Read against the new series, it is a one-point slowdown from June and, on a reported basis, the weakest rate in the five quarters shown.

What drove the 12%

Amy Hood, Microsoft's chief financial officer, gave the explanation in one sentence on the call. "Search advertising revenue ex-TAC increased 12% and was ahead of expectations driven by higher volume and rate across LinkedIn, Edge, and Bing," she said. The 10-Q gives the same explanation.

In Microsoft's usage, rate refers broadly to pricing and volume to the amount of advertising sold. The company gave no figures for either, and it did not say how the gain split between LinkedIn, Edge and Bing.

Satya Nadella, chairman and chief executive, added a share claim without numbers. "In search and advertising, Bing and Edge once again took share," he said. On LinkedIn he offered an engagement measure instead of a revenue one: "In LinkedIn, engagement continues to deepen across our more than 1.4 billion members, with time spent viewing content in the Feed up over 15 percent year over year."

The gap between the two growth rates is telling. Total Search and advertising revenue rose 10.3%, from $5,942m to $6,554m, while the ex-TAC measure rose 12%. Traffic acquisition costs therefore grew more slowly than revenue, or fell. Microsoft does not disclose the TAC amount. In July, PPC Land reported that Microsoft had guided the September quarter's search growth to the mid-single digits, down sequentially, citing third-party partnerships. That forecast was made on the old, Bing-centered metric, and with that metric gone there is no way to check it against the result.

In dollars, the line added $119m on the June quarter, a 1.8% sequential increase. It accounted for 7.1% of Microsoft's revenue, down from 7.7% a year earlier, as Azure grew far faster. Within Devices and Consumer, though, Search and advertising is now the largest business. It generated 42% of the segment's $15.48bn of revenue, ahead of Xbox at $5.38bn and Windows OEM and devices at $3.55bn.

For the December quarter, Hood said: "Search advertising revenue ex-TAC growth should be in the low-double digits driven by consistent trends in rate and volume, with overall search and advertising revenue expected to grow at a similar rate." On a recast base of $6.39bn, growth of 10% or more would put the line above $7bn in a single quarter for the first time, by PPC Land's calculation.

The quarter in numbers

The headline figures beat the guidance Microsoft gave in July, when it forecast revenue of $89.85bn to $90.95bn. Revenue came in at $92.28bn, $1.33bn above the top of that range. The comparisons below are year on year.

• Revenue: $92.28bn, up 19%, from $77.67bn
• Gross margin: $62.56bn, up 17%; gross margin percentage 68%, down one point
• Operating expenses: $16.64bn, up 6%
• Operating income: $45.92bn, up 21% (22% in constant currency); operating margin 50%, against 49%
• Net income: $36.63bn, up 32% on a GAAP basis; $36.42bn, up 18%, excluding the impact of OpenAI investments
• Diluted earnings per share: $4.92, up 32%; $4.89, up 18%, on the same adjusted basis
• Effective tax rate: 20%, against 19%

"We delivered a strong start to the fiscal year with Microsoft Cloud revenue of $63.9 billion, with growth accelerating to 30% (up 31% in constant currency) year-over-year," Hood said in the release. "Results exceeded expectations across revenue, operating income, and earnings per share."

Nadella's statement in the release focused on product positioning. "We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack," he said. "By helping organizations build and own their own intelligence, and earning trust through agent safety and security, we are translating our innovation into growing adoption and real-world impact across every industry."

Agents and Infra

The new commercial segment produced $76.80bn of revenue, up 25%, and $40.56bn of operating income, up 24%. Its operating margin slipped to 52.8% from 53.1%, by PPC Land's calculation, which Microsoft attributed to "sales mix shift to Azure," a lower-margin business than software subscriptions. Cost of revenue in the segment jumped 35%, driven by "investments in datacenter infrastructure," according to the earnings slides.

Azure revenue reached $33.17bn, up $10.78bn or 48%. Azure on its own was five times the size of Search and advertising, and its year-on-year increase alone exceeded the whole advertising line. In July Microsoft had guided to Azure growth of about 45% in constant currency, though the Azure metric was also redefined for fiscal 2027 "for the movement of certain components," according to the 10-Q, so the two numbers are not on an identical basis.

Hood attributed the beat to Foundry, Microsoft's platform for building AI applications and agents, and to squeezing more out of existing hardware. "Azure revenue was ahead of expectations and increased 48%, even with the 3P capacity delays noted earlier, driven by Foundry and improved CPU monetization," she said. Pricing helped as well. "We had higher token pricing than we expected in the quarter," Hood told analysts, referring to the tokens that AI models consume and that cloud customers pay for.

Other lines in the segment:

• Microsoft 365 cloud: $27.78bn, up 17%. Commercial cloud revenue rose 17% reported and 18% adjusted for a one-point prior-year benefit. Paid commercial seats, which now include paid GitHub seats, grew 5%.
• Microsoft 365 consumer cloud: up 17%, with subscribers up 7%, slowing as Microsoft laps a price increase from the prior year.
• Productivity and server licensing: $8.41bn, down 3%.
• Industry solutions: $5.34bn, up 9%; Industry solutions cloud, which includes LinkedIn Talent and Sales Solutions, up 10%, "though bookings trends continued to moderate," Hood said.
• Frontier and support services: $2.11bn, up 4%.

Microsoft Cloud revenue, the combination of Azure, Microsoft 365 commercial cloud and Industry solutions cloud, was $63.9bn, up 30%. Its gross margin fell to 66% from 68% a year earlier.

Commercial bookings fell 12%, a decline Hood tied to "large Azure commitments in the prior year." Bookings had grown 112% and 230% in the first two quarters of fiscal 2026, according to Microsoft's metrics spreadsheet. Commercial remaining performance obligation, the contracted revenue not yet recognized, stood at $677bn, up 73% on the year but flat on the $678bn reported in June. About 30% of it is expected to be recognized within 12 months. Hood warned that "timing related to significant Azure commitments like these will result in material volatility in bookings, making quarterly growth rates less indicative of underlying sales execution."

Devices and Consumer

The consumer segment shrank. Revenue fell 3% to $15.48bn, although operating income rose 2% to $5.36bn, lifting the margin to 35% from 33%. Lower amortization of intangible assets from the Activision Blizzard acquisition did most of that work.

Windows OEM and devices revenue fell 22%, or $1.0bn, to $3.55bn. Windows OEM revenue alone dropped 27%. Hood listed three causes: the prior year's demand from the end of Windows 10 support, "inventory drawdowns by OEM and channel partners, and weaker PC market demand." She added: "Inventory levels remain elevated."

Xbox revenue declined 2% to $5.38bn. Content and services fell 2% on weaker third-party content and Xbox Game Pass, and hardware fell 14% on lower console volumes. Nadella said Minecraft had a record quarter and pointed to Modern Warfare 4, launched the week before the call, and Grand Theft Auto VI, "which is coming to XBOX next month."

OpenAI: $10bn of revenue and a 24% stake

The most consequential disclosure for anyone gauging Microsoft's dependence on one customer sits in the notes to the 10-Q. "For the three months ended September 30, 2026, we recorded revenue from commercial arrangements with OpenAI, inclusive of revenue-sharing payments, of $10.0 billion," the filing states. Accounts receivable from OpenAI rose to $7.2bn at September 30 from $6.0bn at June 30.

That is 10.8% of quarterly revenue, by PPC Land's calculation. Gabriela Borges of Goldman Sachs put it at 11% on the call and asked how Microsoft sees the balance between OpenAI's models and its own. Microsoft makes the disclosure because OpenAI is an equity-method investee and therefore a related party under US accounting rules.

The filing puts Microsoft's interest at "an approximate 24% interest on an as-converted basis." When the companies restructured their partnership in October 2025, PPC Land reported a stake of roughly 27% on an as-converted diluted basis, valued then at about $135bn. The two descriptions are not on an identical basis, and the 10-Q does not explain the difference. Microsoft has made funding commitments of $13.0bn, of which $12.0bn had been paid by September 30. The April 2026 amendment that made Microsoft's IP license non-exclusive and let OpenAI use other clouds left OpenAI's revenue-share payments to Microsoft in place through 2030, subject to a cap. The 10-Q repeats that Microsoft "will continue to receive revenue-sharing payments."

On the income statement OpenAI barely registered this time. Microsoft recorded $272m of net gains from its OpenAI investments in other income, against $4.1bn of losses a year earlier. After tax the gain added $207m, or $0.03 a share, to net income.

Nadella, answering Borges, described OpenAI's latest models as part of a menu rather than a dependency. "They were fantastic models, and we're obviously very thrilled about the progress OpenAI has made with Astra and also what's to come," he said, before describing how customers move between frontier models, open-weight models and Microsoft's own MAI models. "It's like I may start at the frontier. I may go to an open weight. I may go to an MAI model. I may go back to the frontier for the next drop for a few months, come out."

Earlier in the call he set a target for those in-house models: "delivering capabilities comparable to leading models within three to six months of their release at a fraction of the training cost." Microsoft has finished pre-training a base model called MAI-Base-2, which Nadella said has "4 to 12 times greater training compute efficiency" than other open-weight models Microsoft tested. A coding model, MAI Code Flash, "had 3 million users in GitHub Copilot last month alone."

Capex, cash and $364.6bn of leases

Capital expenditures, including assets acquired under finance leases, rose 30% to $45.2bn. Cash paid for property and equipment more than doubled, up 103% to $39.4bn. Hood said spending fell short of plan because of third-party delays. "Capital expenditures were $45.2 billion, as some third-party capacity deliveries we expected in Q1 were delayed," she said. Roughly three quarters of the total went to short-lived assets, mainly CPUs and GPUs, against about half a year earlier, according to the slides.

The delays pushed the annual figure down. "In Q2, we expect CapEx spend will be over $50 billion. Therefore, for the calendar year, spend should be approximately $170 billion due to the 3P capacity delays noted earlier," Hood said. In July, Microsoft had put calendar 2026 capital expenditure at approximately $175bn, including the effect of a lease reclassification. Spending in the three quarters of calendar 2026 already reported totals $118.1bn, which leaves about $51.9bn for October to December, by PPC Land's calculation. Hood expects spending to accelerate again in the second half of the fiscal year, from January to June 2027, as the delayed deliveries arrive.

Free cash flow fell 27% to $18.63bn, from $25.66bn. Operating cash flow rose 29% to $58.0bn on "strong cloud billings and collections," but additions to property and equipment rose to $39.37bn from $19.39bn. Cash, cash equivalents and short-term investments dropped $12.3bn in three months, to $64.5bn. Microsoft also repaid $4.85bn of debt.

The leases are the larger commitment. According to Note 12 of the 10-Q, "we had additional leases, primarily for datacenters, that had not yet commenced of $364.6 billion, with some arrangements subject to certain contractual conditions being met." They start between fiscal 2027 and fiscal 2034 and run for up to 20 years. Existing finance lease liabilities stood at $70.97bn, and interest on lease liabilities was $769m in the quarter, against $546m a year earlier. Depreciation expense rose 56% to $11.1bn, even though Microsoft had said in July that it would extend the estimated useful lives of datacenters and office buildings to 25 years from 15 from the start of fiscal 2027.

The balance sheet also shows how Microsoft is financing the hardware supply chain. Other receivables "related to activities to facilitate the purchase of server components" rose to $35.7bn from $27.8bn in June, and $12.6bn of investments are restricted under a supplier agreement.

Tal Liani of Bank of America asked how Microsoft would raise money if it needed to. Hood pointed first to leases. "There's a form of financing called leasing, and we've been using that one as a vehicle," she said. She noted that the company is "fortunate to have access in the debt markets" but has not yet used it. In her prepared remarks she said: "Given our strong business performance, we expect to continue to remain free cash flow positive in FY27. To complement cash generated by the business and preserve financial flexibility, we will access additional sources of funding when we believe it is attractive to do so."

Nadella, whose July recommendation of Liaquat Ahamed's book 1873 PPC Land examined on October 24, did not mention it this time. He closed his remarks with: "In closing, based on the demand we see, the strength of our products, and the efficiencies we are driving across the stack, I have never been more confident in the long-term returns on our investments."

He also made a pointed comment about what kind of cloud customer he wants. Asked by Bernstein's Mark Moerdler about enterprise demand, Nadella said the enterprise business is "a decade-long thing," contrasting it with relying on "four customers who buy a lot of capacity." His verdict: "And that's not a business, as far as I'm concerned." He did not rule such deals out. "And as long as the pricing is right, we may sell them some. If not, we will be patient about building the breadth business."

Copilot, agents and a shift toward metered billing

Microsoft did not give a Copilot user count. When Liani asked whether the number had been disclosed, Hood said Microsoft "did not disclose" an update and added: "We talked about momentum in revenue and usage."

The momentum figures came as ratios. Nadella said Copilot daily users were "up nearly 50 percent quarter over quarter, and over 5X year over year." The number of customers with more than 50,000 Copilot seats rose more than eightfold, and Volkswagen plans to deploy Copilot to more than 330,000 employees. "We think of Copilot as the new OS for work," he said. Microsoft bundled Chat, Cowork, Autopilot and Code into a single Copilot experience during the quarter.

The pricing model is changing alongside the product. "Our business model is expanding from per-seat subscriptions to include consumption, expanding our TAM and ARPU," Nadella said. The number of Copilot customers consuming credits through usage-based billing grew more than 75% in the quarter. He was careful about how hard to push it. "We don't want them to overbuy one thing and then feel like they're token maxing because that doesn't serve anybody's purpose," he said. Hood said consumption outside coding would be a "slower move."

At GitHub, the shift is further along. "Agent generated PRs have increased 6X over the past six months. And agents now open more than a third of all PRs on the platform," Nadella said. Microsoft announced broad availability of Copilot Fusion, which routes coding tasks across several models, at its GitHub Universe event on October 28. The performance claims differed within the same call. In prepared remarks Nadella said Fusion "delivers frontier-level quality up to 40 percent faster, and at up to 77 percent lower cost." In the question-and-answer session he cited a third-party benchmark and said users could get "frontier performance 45% faster, 75% cheaper." Neither set of figures came with a methodology.

Other platform numbers from Nadella's remarks:

• Foundry: more than 120,000 customers, with revenue "more than tripling year over year."
• Fabric: more than 44,000 paid customers, up more than 50%.
• Agent 365: "Over 50 million agents are now in the registry, up over 30 percent quarter over quarter."
• Microsoft Purview: 7.6bn agent activities audited to date, up fivefold on the previous quarter.
• Datacenters: 24 new datacenters across five continents in the quarter, with "dock-to-live" times for new Nvidia GB300 systems in its biggest regions cut by about 20% on the previous quarter.
• Chips: Maia 200 delivers "up to 1.7 times more tokens per watt" in Teams and Copilot; Maia 300 is designed for "40 percent more tokens per watt compared to leading GPU-based systems."

Nadella also named three outside agents adopting Microsoft Execution Containers, a new policy layer for running AI agents inside secure boundaries on Windows and other platforms: "Agents like OpenAI Codex, Anthropic Claude Code, and Meta Muse are adopting MXC, and customers like Meta are starting to deploy it across their enterprise environments." Anthropic's own IPO filing, reported by PPC Land on October 26, shows a commitment to Azure of at least $44.9bn running from November 2026 to May 2033. Microsoft's earnings documents do not mention that contract.

Guidance for the December quarter

Microsoft gave the following outlook for the three months to December 31, 2026, in the outlook slides and on the call. Hood said currency movements should have no meaningful effect.

The Devices and Consumer range implies a decline of between 2.6% and 5.5% from the recast $16.83bn of a year earlier, by PPC Land's calculation, with Windows weighing on the segment for the rest of the fiscal year. "As in prior quarters, the range of potential outcomes remains wider than normal," Hood said of Windows. She added that operating margins should be "down slightly year-over-year."

Azure supply remains the constraint. "Customer demand continues to exceed available supply," Hood said, adding that efficiency gains should help "offset some 3P GPU as a service contracts that have been delayed to H2."

Headcount, the exit offer and LinkedIn's GDPR appeal

Total company headcount fell 2% year on year, according to the 10-Q, which does not give an absolute number. Two days before the results, Microsoft offered a Voluntary Exit Offer to employees at level 70 and below in participating teams in Canada, India, the UK and the US. Hood confirmed its cost is in the outlook but gave no figure. "Our cost guidance across both COGS and OpEx includes an estimate for the recently announced employee voluntary exit offer," she said. Sales and marketing expenses were flat at $5.72bn, while research and development rose 11% to $9.05bn.

The 10-Q also updates a regulatory case touching Microsoft's advertising business. In October 2024 the Irish Data Protection Commission fined LinkedIn €310m over its behavioral analysis and targeted advertising, following a complaint first investigated in 2018. LinkedIn appealed in November 2024. According to the filing, "a preliminary hearing was held in December 2025. The court issued a ruling on the standard of review, which the IDPC has appealed." The 10-Q does not state the fine amount or say when the appeal will be decided. Separately, Microsoft had accrued $582m for legal liabilities at September 30 and estimates that reasonably possible adverse outcomes could add about $400m.

Shareholders received $10.2bn in the quarter: $7.3bn in declared dividends and $2.9bn in buybacks covering 6 million shares. The quarterly dividend rose to $0.98 a share from $0.91, and $37.7bn remains under the $60bn repurchase program.

Why this matters for marketers

For advertisers who buy Bing, the practical consequence of the new reporting is a loss of visibility. Through fiscal 2026, Microsoft's quarterly search figure was the main official, recurring indicator of how its search ad business was performing, and PPC Land tracked it each quarter. It now arrives blended with LinkedIn, a business with different buyers, different formats and, in the case of Premium, subscription revenue that is not advertising at all. Is Bing growing at 12%, or is LinkedIn carrying it? The October 28 documents do not say.

The comparison with the rest of the market is less flattering in absolute terms. Meta's advertising revenue rose 26% to $63.06bn in its September quarter, nearly ten times Microsoft's combined Search and advertising line. Google's Search and other revenue was $63.3bn in the April to June quarter alone, about two and a half times what the recast Microsoft line earned in all of fiscal 2026.

The "higher rate" Hood cited also deserves context, since Microsoft did not connect it to any product change. The quarter followed a series of moves toward automation in Microsoft Advertising. AI Max began rolling out to all accounts worldwide in August, and Microsoft said it would stop accepting Max CPC bids on new non-portfolio campaigns from October 1. In October it added LinkedIn company lists of up to 10,000 firms to Microsoft Advertising targeting, one of several ways LinkedIn data now flows into Microsoft Advertising. Supply moved in the other direction in July, when Microsoft began rolling out a Windows search box redesign that removes ads from web results.

LinkedIn's advertising business is also being sold through more doors. After Microsoft shut its Invest DSP in February, LinkedIn data reached Microsoft Monetize's streaming inventory through Amazon DSP in May, and on October 22, three weeks after the quarter closed, LinkedIn CTV Ads became available through Google's Display and Video 360 for US targeting. Both deals widen distribution for a LinkedIn advertising business that now reports in the same line as Bing.

Edge, named alongside Bing as a source of growth, is not bound by the browser choice screen obligation of the Digital Markets Act in Europe. In September the EU General Court dismissed Opera's challenge to the Commission's decision not to designate Edge as a gatekeeper.

Then there is scale. For a hyperscaler of Microsoft's size, advertising is a side business: $45.2bn of capital expenditure in one quarter against $6.55bn from Search and advertising. Advertising remains a small and slower-growing part of Microsoft. The segment change has made it a little harder to see.

Timeline

• 2018 - The Irish Data Protection Commission begins investigating LinkedIn's targeted advertising under GDPR
• October 24, 2024 - The Irish regulator fines LinkedIn €310m; LinkedIn appeals in November 2024
• October 28, 2025 - Microsoft and OpenAI restructure their partnership, leaving Microsoft with roughly 27% of OpenAI Group PBC
• October 29, 2025 - Microsoft reports 16% growth in search and news advertising ex-TAC for the September 2025 quarter
• December 2025 - Preliminary hearing in LinkedIn's appeal against the Irish fine
• January 10, 2026 - Microsoft launches checkout inside Copilot
• January 28, 2026 - Search ex-TAC growth slows to 10% in the December 2025 quarter
• February 28, 2026 - Microsoft Invest DSP shuts down
• April 27, 2026 - Microsoft and OpenAI amend their agreement, making Microsoft's IP license non-exclusive
• April 29, 2026 - Search ex-TAC growth rebounds to 12% in the March quarter
• May 2026 - LinkedIn data reaches Microsoft Monetize CTV inventory through Amazon DSP
• July 13, 2026 - Microsoft begins rolling out a Windows Search redesign without ads in web results
• July 29, 2026 - Microsoft reports 10% search growth for the June quarter, guides calendar 2026 capex to about $175bn; Nadella names "1873" as the book to be read
• August 19, 2026 - AI Max rolls out to all Microsoft Advertising accounts
• September 2, 2026 - EU General Court dismisses Opera's Edge gatekeeper challenge
• September 2026 - Microsoft announces the Agents and Infra and Devices and Consumer segments
• September 15, 2026 - Board declares a quarterly dividend of $0.98 a share
• September 30, 2026 - First quarter of fiscal 2027 ends
• October 1, 2026 - Microsoft stops accepting Max CPC on new non-portfolio campaigns
• October 6, 2026 - Microsoft Advertising adds LinkedIn company lists of up to 10,000 firms
• October 21, 2026 - Meta reports 26% advertising revenue growth for its September quarter
• October 22, 2026 - LinkedIn CTV Ads become available through Google DV360 in the US
• October 26, 2026 - Microsoft offers a Voluntary Exit Offer in four countries; Anthropic's S-1 shows at least $44.9bn of Azure commitments
• October 28, 2026 - Microsoft reports fiscal 2027 first-quarter results and files its 10-Q; GitHub Universe announces broad availability of Copilot Fusion
• November 19, 2026 - Record date for the $0.98 dividend
• December 10, 2026 - Dividend payment date
• December 31, 2026 - End of the quarter covered by the new guidance

Related PPC Land coverage

• Microsoft search ad growth drops to 10% as Azure tops $100 billion - The June 2026 quarter, the last reported under the old search metric, with calendar 2026 capex guided to about $175bn.
• Microsoft search ads bounce back to 12% as AI business hits $37B run rate - The March 2026 quarter, when search ex-TAC growth rose to 12% and LinkedIn grew 12%.
• Microsoft's search ad growth slows to 10% - The December 2025 quarter, with search ex-TAC revenue of $3.8bn and commercial RPO of $625bn.
• Microsoft cloud revenue hits $49.1 billion as AI investments accelerate - The September 2025 quarter, the year-ago comparison, including a $3.1bn OpenAI hit to net income.
• Satya Nadella calls '1873' the book to be read as Microsoft spends $41bn - Nadella's "1873" book recommendation and the AI overbuilding debate around it.
• Microsoft offers exit packages to staff in four countries - The Voluntary Exit Offer whose cost is now in Microsoft's guidance.
• Microsoft and OpenAI rewrite the deal: what actually changed - The April 2026 amendment that ended exclusivity and capped revenue-share payments.
• Microsoft and OpenAI restructure partnership with new governance framework - The October 2025 restructuring that set Microsoft's stake at about 27%.
• Amazon, Google and Microsoft hold $269bn of Anthropic compute contracts - Anthropic's IPO filing and its Azure commitment of at least $44.9bn.
• LinkedIn Ireland faces €310 million fine for GDPR violations in data processing - The 2024 Irish decision LinkedIn is still appealing.
• LinkedIn job-title targeting reaches Google DV360 CTV buys in the US - LinkedIn CTV Ads sold programmatically through Google's DSP from October 22.
• Microsoft Monetize's survival bet: LinkedIn data on Amazon DSP CTV - How LinkedIn audiences reached streaming inventory after Microsoft Invest closed.
• Microsoft Advertising gains AI Max across all accounts globally - The August 2026 global rollout of AI Max in Microsoft Advertising.
• Microsoft retires Max CPC as ChatGPT Ads defaults to automated bidding - The end of manual Max CPC bids on new non-portfolio campaigns from October 1.
• Microsoft Advertising gains LinkedIn company lists of up to 10,000 firms - Microsoft Advertising's October newsletter and its LinkedIn targeting additions.
• Microsoft kills ads in Windows Search, hands users an opt-out - The July 2026 Windows Search redesign that removed ads from web results.
• Microsoft launches checkout inside Copilot as AI commerce battle intensifies - Copilot checkout with PayPal, Shopify and Stripe.
• Opera loses Edge gatekeeper case as court cites 5.8% browser usage - The EU General Court ruling that keeps Edge outside DMA gatekeeper obligations.
• Meta takes $9.89bn teen settlement charge as ad revenue gains 26% - Meta's September 2026 quarter, the closest same-period comparison for ad growth.
• Google Search ads gain 17% to $63.3 billion while network drops 1% - Alphabet's June 2026 quarter, for scale against Microsoft's search line.

Summary

Who: Microsoft, through chairman and chief executive Satya Nadella and chief financial officer Amy Hood, with analysts from Morgan Stanley, UBS, Bernstein, Goldman Sachs, Jefferies, Stifel and Bank of America on the earnings call. The results affect advertisers buying Bing, Edge, MSN and LinkedIn inventory, and touch OpenAI, which supplied $10.0bn of Microsoft's revenue.

What: Microsoft's fiscal 2027 first-quarter results: revenue of $92.3bn, up 19%; operating income of $45.9bn, up 21%; Azure up 48%; capital expenditures of $45.2bn. Search and advertising revenue rose 10% to $6.55bn and 12% excluding traffic acquisition costs, under a new definition that adds LinkedIn Marketing Solutions and Premium Subscriptions to Bing, Edge and MSN. Microsoft lowered calendar 2026 capex to about $170bn from about $175bn and disclosed $364.6bn of leases not yet commenced.

When: Results were announced on October 28, 2026, for the quarter ended September 30, 2026. Guidance covers the quarter ending December 31, 2026.

Where: The earnings release, slides, outlook deck and conference call were published from Microsoft's headquarters in Redmond, Washington, and the 10-Q was filed with the US Securities and Exchange Commission the same day.

Why: The quarter is the first under Microsoft's new Agents and Infra and Devices and Consumer segments. The change ends the stand-alone search growth figure advertisers have used to track Bing and folds LinkedIn's ad revenue into the same line, while the scale of AI infrastructure spending, the OpenAI revenue concentration and the lease commitments show where Microsoft's capital is going.