TL;DR
- Microsoft's search and advertising product revenue was $6,554m in July to September 2026, up $612m or 10% from $5,942m, per its 10-Q.
- From fiscal 2027 the ex-TAC growth metric includes LinkedIn Marketing Solutions and Premium Subscriptions; LinkedIn Talent and Sales Solutions moved to Industry solutions cloud.
- The April to June 2026 quarter, first reported on 29 July as 10% search advertising ex-TAC growth, reads 13% on Microsoft's recast series.
- CFO Amy Hood guided October to December 2026 ex-TAC growth to the low-double digits; Microsoft gave no Thai or regional ad data.
Microsoft reported on 28 October 2026 that its "search and advertising revenue excluding traffic acquisition costs" grew 12% (12% in constant currency) in the first quarter of fiscal year 2027, the three months to 30 September 2026. The search and advertising product line brought in $6,554 million, up from $5,942 million a year earlier. The number that matters most for Bing advertisers is a definition, though: from this quarter Microsoft's growth metric folds LinkedIn Marketing Solutions and Premium Subscriptions in with Bing search advertising, so the 12% is no longer a Bing-only figure and cannot be compared with the search growth rates Microsoft published before.
What Microsoft reported for search and advertising
The headline figure comes from Microsoft's first-quarter earnings release, published on its investor relations site as the Microsoft FY27 Q1 press release and webcast page and filed with the US Securities and Exchange Commission as Exhibit 99.1. Under the Devices and Consumer segment, the release lists one advertising line: "Search and advertising revenue excluding traffic acquisition costs increased 12%." The constant currency reconciliation table in the same release shows currency had no effect on that number, so the reported and constant currency growth rates are both 12%.
The release's product and service revenue table gives the dollar amounts. Search and advertising revenue was $6,554 million in the September 2026 quarter against $5,942 million in the September 2025 quarter. Microsoft's quarterly report on Form 10-Q describes that as an increase of $612 million, or 10%. The 10-Q attributes the 12% ex-TAC growth to "higher rate and volume across LinkedIn, Edge, and Bing."
Two different growth rates therefore sit side by side, and they measure different things. The 10% is total revenue for the product line, which includes the traffic acquisition costs Microsoft pays partners. The 12% strips out those costs, so it tracks the revenue Microsoft keeps. Microsoft did not disclose the dollar value of traffic acquisition costs in the release.
What CFO Amy Hood and CEO Satya Nadella said
On the earnings call on 28 October 2026, chief financial officer Amy Hood said search advertising revenue ex-TAC "increased 12% and was ahead of expectations", driven by higher volume and rate across LinkedIn, Edge and Bing. Chairman and CEO Satya Nadella told investors: "In search and advertising, Bing and Edge once again took share." He gave no share figures, no market and no comparison period for that claim.
Nadella's next remarks covered LinkedIn, which now sits inside the same advertising metric. He said LinkedIn has more than 1.4 billion members and that time spent viewing content in the LinkedIn Feed was up more than 15% year over year. Those are engagement figures, not ad revenue figures, and Microsoft did not publish a separate LinkedIn advertising number.
The definition change: why the 12% is not a Bing number
Microsoft reorganised its reporting segments for fiscal year 2027, a change it announced in September 2026. The old three segments (Productivity and Business Processes, Intelligent Cloud and More Personal Computing) were replaced by two: Agents and Infra, and Devices and Consumer. The 10-Q states that, alongside the segment change, Microsoft updated several metrics to "align our metrics with how we manage and monitor certain businesses", including "the Search and advertising revenue growth metrics for the movement of certain components."
The new metric definition, published on Microsoft's FY27 Q1 metrics page and in the 10-Q, reads: 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." The 10-Q also describes the search and advertising product line as including "Bing, Microsoft Edge, LinkedIn Marketing Solutions and Premium Subscriptions, third-party affiliates, and MSN."
LinkedIn's other businesses went elsewhere. The 10-Q says the new Industry solutions cloud metric combines Dynamics 365 with LinkedIn Talent Solutions, LinkedIn Sales Solutions and Healthcare and Life Sciences cloud. So LinkedIn's advertising and premium subscription revenue now counts toward search and advertising, while its recruiting and sales tools count toward Industry solutions cloud.
How the old reporting looked
The contrast with the previous quarter is plain. In its fourth-quarter fiscal 2026 release, dated 29 July 2026, Microsoft reported under the old segments that "Search advertising revenue excluding traffic acquisition costs increased 10% (up 9% in constant currency)" and, as a separate line, that "LinkedIn revenue increased 12% (up 10% in constant currency)." Bing-led search advertising and LinkedIn were two distinct disclosures. From the 28 October 2026 release onward there is one combined advertising metric and no separate LinkedIn revenue growth line in the business highlights.
The recast series Microsoft published
Microsoft's FY27 Q1 metrics page restates the prior four quarters on the new basis, with a note that it has "recast certain prior period amounts to conform to the way we internally manage and monitor our business." The search and advertising ex-TAC growth rates on that page are shown below, with reported growth first and constant currency growth second.
| Quarter (Microsoft fiscal) | Search and advertising ex-TAC growth, recast (reported / constant currency) |
|---|---|
| Q1 FY26 (Jul to Sep 2025) | 16% / 15% |
| Q2 FY26 (Oct to Dec 2025) | 13% / 12% |
| Q3 FY26 (Jan to Mar 2026) | 14% / 11% |
| Q4 FY26 (Apr to Jun 2026) | 13% / 12% |
| Q1 FY27 (Jul to Sep 2026) | 12% / 12% |
Read against this series, the 12% is the slowest reported growth rate of the five quarters shown, one point below the recast June quarter. In constant currency it is in line with the June quarter and one point above the March quarter. The series reports fiscal year 2026 as a whole at 14% reported and 12% in constant currency.
The June 2026 quarter shows how much the definition moves the number. Under the old definition Microsoft reported search advertising ex-TAC growth of 10% for that quarter on 29 July 2026. On the recast basis the same quarter reads 13%. That three-point gap reflects the components Microsoft moved into the metric; Microsoft did not say how much of it came from LinkedIn. Anyone who kept a spreadsheet of Microsoft's search growth rates over the past few years now has a break in the series at June 2026.
Guidance for October to December 2026
For the second fiscal quarter, which runs from October to December 2026, Amy 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. She guided Devices and Consumer segment revenue to $15.9 billion to $16.4 billion for the quarter.
"Low-double digits" on the new basis means growth roughly in line with the 12% just reported. Microsoft did not split that guidance between Bing, Edge, MSN and LinkedIn, and it did not say whether Bing's own growth is accelerating or slowing.
Where search and advertising sits inside Microsoft
Search and advertising is a small part of a much larger company. Microsoft reported total revenue of $92.3 billion for the quarter, up 19%, and operating income of $45.9 billion, up 21%. Azure revenue alone was $33,165 million. The Agents and Infra segment, which holds Azure and Microsoft 365 commercial cloud, brought in $76.8 billion and grew 25%.
Inside Devices and Consumer the picture is different. That segment's revenue was $15,484 million, down 3% from $16,001 million, while its operating income rose to $5,357 million from $5,243 million. The 10-Q says the revenue decline was "driven by Windows OEM and devices, offset in part by growth in Search and advertising." Windows OEM and devices revenue fell 22% and XBOX content and services fell 2%. By RA's own calculation from Microsoft's figures (not a figure Microsoft published), search and advertising's $6,554 million was about 42% of Devices and Consumer revenue, making it the segment's largest line and the one that grew while Windows and XBOX shrank.
What this means for Microsoft Advertising and Bing advertisers
For advertisers who buy Microsoft Search Network inventory, the practical consequence is a lost benchmark. Until July 2026 Microsoft's quarterly search advertising ex-TAC growth was a reasonable public proxy for how the Bing ads marketplace was growing. From this quarter that proxy is blended with LinkedIn's advertising and subscription revenue, and Microsoft does not publish the split.
What the source does and does not tell you
- It tells you that the combined business grew 12% ex-TAC, that Microsoft attributes the growth to both higher rate and higher volume, and that all three named properties (LinkedIn, Edge and Bing) contributed.
- It tells you Microsoft believes Bing and Edge gained share, without any figure, market or measurement method.
- It does not tell you how fast Bing search advertising grew on its own, how much of the 12% came from LinkedIn, or how "rate" is measured. Microsoft did not define rate in the release or the metrics page, so it should not be read as a direct statement about cost per click.
- It does not give any country or regional breakdown, so there is nothing in it specific to Thailand or Southeast Asia.
What to check in your own account
Because the public number no longer isolates Bing, your own Microsoft Advertising data becomes the better benchmark. A few practical checks follow from the disclosure.
- Compare your average CPC and impression volume quarter on quarter in Microsoft Advertising for July to September 2026 against the same quarter of 2025. If Microsoft's "higher rate" comment applies to search, it may show up as cost pressure; if your costs are flat, the rate increase may sit mostly on LinkedIn or elsewhere.
- Do not use the 12% to justify a Microsoft Search budget increase in a client or board deck. It includes LinkedIn Marketing Solutions and Premium Subscriptions, and the recast history makes it look smoother than the old Bing-led series.
- If you run both Microsoft Advertising and LinkedIn campaigns, report them separately. Microsoft's own metric merging them is a reporting choice by the company, not a sign the two channels behave the same way for performance.
- Recheck conversion tracking before you read any cost trend. RA has previously covered recent Microsoft Advertising changes, including Conversions API general availability and the removal of Max CPC from new non-portfolio campaigns on 1 October 2026, which falls in the quarter Microsoft has just guided. Changes in bidding behaviour can move your CPCs independently of anything in Microsoft's results.
Teams that manage paid search across both Google and Microsoft can fold this into their normal channel review. RA's Google Ads management service covers search planning across engines, and clean measurement is what makes any platform comparison credible, which is where a Google Analytics 4 setup and migration earns its keep.
What this means for Thai marketers
Microsoft did not publish any Thai or regional advertising data in its 28 October 2026 materials, so the results say nothing directly about Bing auction conditions in Thailand. The definition change still matters locally in two ways. First, Thai B2B advertisers who use LinkedIn should know that LinkedIn's advertising performance is now reported by Microsoft only as part of a blended number, so there is no longer a standalone LinkedIn revenue growth figure to cite. Second, anyone presenting market context to Thai stakeholders should quote the 12% with its definition attached: search and advertising ex-TAC including LinkedIn Marketing Solutions and Premium Subscriptions, not Bing search alone.
FAQ
How much did Microsoft's search advertising grow in Q1 FY2027?
Microsoft's search and advertising revenue excluding traffic acquisition costs grew 12% (12% in constant currency) in the quarter to 30 September 2026. Total search and advertising revenue, including those costs, rose 10% to $6,554 million from $5,942 million, according to Microsoft's 28 October 2026 earnings release and its 10-Q.
Does Microsoft's search and advertising figure include LinkedIn?
Yes, from fiscal year 2027 the metric includes LinkedIn Marketing Solutions (ex TAC) and Premium Subscriptions alongside Bing search advertising. Microsoft's 10-Q describes the product line as covering Bing, Microsoft Edge, LinkedIn Marketing Solutions and Premium Subscriptions, third-party affiliates and MSN. LinkedIn Talent Solutions and Sales Solutions moved to the Industry solutions cloud metric instead.
Can I still compare this with Microsoft's older Bing growth rates?
No, not directly, because the definition changed. Microsoft originally reported 10% search advertising ex-TAC growth for the April to June 2026 quarter, and its recast series now shows 13% for the same quarter. Use the recast series on Microsoft's FY27 Q1 metrics page for like-for-like comparisons.
What growth does Microsoft expect next quarter?
Microsoft expects search advertising revenue ex-TAC growth "in the low-double digits" for October to December 2026, with overall search and advertising revenue growing at a similar rate. CFO Amy Hood attributed the outlook to consistent trends in rate and volume.
Did Microsoft give any data for Thailand or Southeast Asia?
No, Microsoft's release, metrics page and earnings call remarks for the quarter contain no country or regional advertising figures. Satya Nadella's statement that Bing and Edge "once again took share" also came without a market or a number.
The bottom line
Microsoft's 12% is solid growth for a combined Bing, Edge, MSN and LinkedIn advertising business, and the company says it beat its own expectations. For a Bing advertiser it is a weaker benchmark than it looks, because LinkedIn is inside it and the history has been restated. Treat your own Microsoft Advertising cost and volume data as the reference point, and keep the platforms separate in reporting. If you want a second opinion on how your search budget is split between engines, RA's paid search team is happy to review it with you.
