 is extending the useful life of its data centers and office buildings to 25 years from 15, effective .jpg){kind=logo}
Microsoft is extending the useful life of its data centers and office buildings to 25 years from 15, effective 
Featured: Editorial landscape view of a Microsoft data center facility showing cooling infrastructure and architecture.this fiscal year. The company reported fiscal first-quarter Microsoft Cloud revenue up 30% on Oct. 28, with Azure revenue up 48%, according to Microsoft's earnings release.
"Effective at the start of FY27, we are extending the estimated useful life of our data centers and office buildings from 15 to 25 years, reflecting our operating history and expected use of these assets," said Amy Hood, chief financial officer at Microsoft. Microsoft disclosed the extension on its fiscal fourth-quarter 2026 earnings call on July 29, 2026, and said it expects a minimal benefit to fiscal 2027 operating income.
The longer depreciation schedule moves more of Microsoft's future data center leases from finance leases, which count toward reported capital expenditure, to operating leases, which do not. Microsoft reported first-quarter capital expenditure of $45.2 billion, which Hood tied in part to delayed third-party capacity deliveries, and she guided to more than $50 billion for the current quarter.
Microsoft Cloud revenue was $63.9 billion for the September quarter, and total revenue was $92.3 billion, up 19%, with operating income of $45.9 billion. Chief executive Satya Nadella said Microsoft added 24 data centers across five continents during the quarter.
Bloomberg reported on Sept. 10, 2026, that Microsoft plans to expand its data center capacity to more than 38 gigawatts by 2032 from roughly 12 gigawatts, citing people familiar with the plans. Microsoft has not confirmed that figure. On the July 29 call, Nadella said the company added 31 data centers across five continents in the June quarter, taking its fiscal 2026 total to 88, and that it remains on track to roughly double its overall capacity in two years.
Microsoft's fiscal 2026 annual report disclosed $329.1 billion of leases, primarily for data centers, that had not commenced at June 30, 2026, with start dates between fiscal 2027 and fiscal 2033, according to Global Data Center Hub. Baxtel tracks 439 Microsoft Azure data center sites worldwide, including the operational Fairwater MKE1 campus in Mount Pleasant, Wisconsin, recorded at 48 MW.
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