Microsoft has never previously disclosed Azure's quarterly revenue in dollar terms. The company typically only provides growth rates or general descriptions of revenue milestones. However, upon announcing another record-breaking quarter on Wednesday, Microsoft revealed that Azure generated $33.2 billion in revenue for the July to September quarter, a 48% increase year-over-year.
This disclosure enables investors to more directly compare Azure’s performance with Amazon Web Services and Google Cloud, whose parent companies have previously disclosed their cloud revenue quarterly in U.S. dollars.
Alphabet also reported earnings on Wednesday, stating that Google Cloud generated $30.7 billion in revenue during the same quarter, slightly below Azure. However, Google Cloud includes the Google Workspace subscription business. According to TechCrunch’s calculations, Google Cloud’s revenue roughly doubled year-over-year, growing at approximately twice the rate of Azure.
Azure provides enterprises with scalable computing power to run applications, SaaS solutions, and build and deploy AI models. According to Microsoft itself, Azure is now the company’s largest and fastest-growing product line, accounting for approximately 36% of Microsoft’s quarterly revenue of $92.3 billion.
Azure's revenue also exceeded analysts' expectations of $32.3 billion by approximately $850 million. Azure's 48% growth rate also surpassed the 44% to 45% range forecast by Microsoft CFO Amy Hood during the company's July earnings call.
Azure belongs to Agents and Infra, one of two new business units established by Microsoft this quarter. Previously, Microsoft reported three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The new Agents and Infra segment combines Azure with Microsoft 365’s cloud businesses, generating $76.8 billion in revenue, a 25% year-over-year increase.
Amazon will report earnings on Thursday. Analysts also expect its cloud business, Amazon Web Services, to continue growing. AWS has been the largest cloud service since its inception, and no one currently expects Microsoft to surpass it. However, as all companies begin disclosing actual dollar revenues, this competition is becoming more tangible.