MSFT · 10-Q · 2026Q3 · Full report

Microsoft 365 Adoption and Upsell

MICROSOFT CORP · 2026-10-28 · Importance 48 · Surprise 40

Microsoft 365 cloud revenue increased 17%, with commercial cloud growth driven by higher revenue per user, continued upsell to premium offerings, and increased usage-based services consumption, primarily GitHub Copilot. Premium offerings cited include Microsoft 365 Copilot, E5, and E7. Commercial seats grew 5%, supported by installed-base expansion across customer segments, particularly small and medium businesses and frontline workers; consumer cloud revenue also rose 17%, with subscribers up 7%.

Key facts

• Microsoft 365 cloud revenue increased $4.1 billion, or 17%, driven by Microsoft 365 commercial cloud. source
• Microsoft 365 commercial cloud revenue increased 17% in Q1 FY2027 versus Q1 FY2026. source
• Microsoft updated its Microsoft 365 commercial seat growth metric to include paid GitHub seats in Q1 FY2027. source
• Microsoft 365 commercial cloud revenue increased 17%, driven by higher revenue per user, premium-seat upsell including Microsoft 365 Copilot, E5, and E7, and greater usage-based service consumption, primarily GitHub Copilot. source
• Microsoft 365 consumer cloud revenue increased 17%, driven by revenue per user growth and 7% Microsoft 365 consumer subscriber growth. source
• Microsoft 365 commercial seats grew 5%, driven by installed-base expansion across customer segments, primarily small and medium business and frontline worker offerings. source