Microsoft revenue rises 19% as search advertising grows 12%

By Olivia Hart

Microsoft reported first-quarter 2027 revenue of $92.3 billion, up 19% year over year, while search and advertising revenue excluding traffic acquisition costs increased 12%. Operating income reached $45.9 billion, and GAAP net income reached $36.6 billion.

Microsoft wrote, “Search and advertising revenue excluding traffic acquisition costs increased 12%.” Search sits within the More Personal Computing division. The measure does not represent a disclosed Bing-only growth rate, a distinction that matters for publishers and advertisers reading the headline.

How strong were Microsoft’s broader results?\n

• Revenue was $92.3 billion, an increase of 19%.
• Operating income was $45.9 billion, up 21% as reported and 22% in constant currency.
• GAAP net income was $36.6 billion, up 32%. Non-GAAP net income was $36.4 billion, up 18%, or 19% in constant currency.
• Diluted earnings per share was $4.92, up 32% on a GAAP basis. The non-GAAP figure was $4.89, up 18%, or 19% in constant currency.
• Microsoft excluded the impact of investments in OpenAI from its non-GAAP results.

Microsoft’s stock traded more than 7% higher in after-hours trading within minutes of the earnings release.

Microsoft delivered higher revenue, operating income, net income, and diluted earnings per share in every presentation it reported, giving the broader results more support than a single advertising line.

Takeaway: Microsoft’s quarter was broadly strong, not merely an advertising story.

Does the 12% figure mean Bing ads grew 12%?

No standalone Bing revenue result appears in the release figures. Calling the 12% result “Bing Ads revenue” narrows a broader, company-defined measure that combines search and advertising and excludes traffic acquisition costs.

The release gives no Bing-only dollar amount. It also provides no separate figures for impressions, clicks, cost per click, conversions or Microsoft Search queries. The confirmed result therefore applies only to the combined metric Microsoft quoted.

Readers should treat 12% as the growth of a company-defined aggregate, because the source supplies neither a product breakout nor a comparable prior-period dollar figure for an independent Bing calculation.

Takeaway: The 12% search figure is confirmed, but its product scope is narrow.

How does the latest quarter compare?\n

Microsoft’s narrative places the latest 12% reading two percentage points above the previous quarter’s 10%.

• Latest cited reading: 12%
• Previous quarter: 10%
• Earlier readings, moving backward: 12%, 10%, 16% and 21%

The source also references a quarter-by-quarter chart, but its visible values do not appear in the accompanying text. The narrative then ends by saying the current quarter is up only 10%. That statement conflicts with the title, the opening paragraph and Microsoft’s direct quote.

Without the chart’s values, the conflict remains unresolved. The confirmed reading remains 12% because it appears in Microsoft’s quoted release language. The stray 10% figure cannot be reconciled with that company statement.

Read backward through the stated sequence, growth moved from 21% to 16%, then 10%, 12%, 10% and 12%, which shows recovery from the previous quarter but no return to the earlier peak.

Takeaway: The latest increase improved two points, but remained below the earlier 21% reading.

What did Satya Nadella say about growth?\n

Satya Nadella, Microsoft’s chairman and chief executive officer, said:

“We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack. 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.”

His language links financial performance to broader product adoption, customer control, agent safety and security, although the release excerpt provides no adoption percentages or security measurements. The source also points to a forum discussion on X.

Takeaway: Nadella offered a strategy narrative, not measurable proof of adoption or safety.

What can advertisers and site owners conclude?\n

The release gives no industry breakdown for retail, travel, financial services, local services or enterprise advertisers. It cannot show which vertical produced the 12% increase in the combined search-and-advertising measure. Advertisers also cannot use the aggregate to infer impressions, click-through rates, cost per click or conversions.

For site owners, the release offers no separate data for ecommerce stores, publishers, affiliates, directories or local-business sites. It provides no organic search traffic, ranking, indexing, AI-answer, spam-policy or revenue-per-visit figures. This is a financial disclosure, not a search-quality report, and it contains no tool-based ranking signal.

The defensible conclusion is limited: Microsoft’s named search-and-advertising group grew 12%, and the company as a whole expanded revenue, operating income and net income sharply.

Takeaway: Advertisers get a revenue signal, while site owners get no reliable traffic forecast.

What should readers monitor next?\n

Monitor the next earnings release for the same search-and-advertising measure against the prior quarter’s 10% reading. Look for any Bing or Microsoft Search breakout within More Personal Computing, plus clearer figures behind Nadella’s adoption, cost-efficiency, agent-safety and security claims. Track how the OpenAI investment adjustment changes the gap between GAAP and non-GAAP results.

What to watch: The next release should show whether search advertising holds the 12% pace, returns toward the previous 10% reading, or adds enough product detail to explain the aggregate.