Microsoft has disclosed for the first time the dollar value of Azure's quarterly revenue, reporting $33.2 billion for the July-September quarter, a 48% increase compared to the previous year. This marks a significant milestone as Microsoft typically shared only growth rates or vague revenue milestones for its cloud platform.
This new transparency allows investors to directly compare Azure's performance with competitors like Amazon Web Services (AWS) and Google Cloud, whose parent companies regularly report cloud revenues in dollar terms. Alphabet reported Google Cloud revenue of $30.7 billion for the same quarter, placing Azure slightly ahead in absolute revenue. However, Google Cloud's revenue growth rate nearly doubled Azure's, reflecting faster expansion.
Azure, which provides businesses with cloud computing resources for applications, SaaS, and AI model development, is now Microsoft's largest and fastest-growing product line. It accounted for approximately 36% of Microsoft's total quarterly revenue of $92.3 billion.
The reported Azure revenue also exceeded analyst expectations by about $850 million and outpaced the growth forecast of 44% to 45% given by Microsoft CFO Amy Hood earlier this year.
Azure is part of Microsoft's newly formed Agents and Infra segment, which combines Azure with Microsoft 365's cloud services. This segment generated $76.8 billion in revenue, up 25% year-over-year. Previously, Microsoft reported three segments, but this restructuring reflects a strategic shift in how the company presents its cloud business.
Amazon is set to report its earnings next, with AWS expected to continue its position as the largest cloud provider. With all major cloud providers now reporting revenue in dollars, the competitive landscape in cloud computing is becoming clearer and more closely watched by investors and industry observers.