Microsoft Posts Record $331 Billion Revenue as Azure Tops $100 Billion for First Time

Quick Facts

• Microsoft reported Q4 revenue of $90.01 billion and EPS of $4.74, beating analyst estimates of $87.61 billion and $4.24 per share.
• Azure grew 43% year over year, ahead of the 40% consensus estimate, surpassing $100 billion in annual revenue for the first time.
• The stock rose more than 8% in after-hours trading after the results, recovering from a 19% year-to-date decline heading into the print.

Microsoft reported its strongest annual results on record Wednesday, posting fiscal fourth-quarter revenue of $90.01 billion and net income of $35.77 billion. Full-year revenue reached $331.8 billion, up 18%, while Microsoft Cloud revenue exceeded $214 billion, up 27%.

The quarter ended June 30. Earnings per share came in at $4.74, a 23% increase adjusted for the impact of the company’s investment in OpenAI. Net income rose from $27.23 billion, or $3.65 per share, in the same quarter a year ago.

Azure Breaks Through

Azure growth accelerated to 43% in the quarter, up from 40% in the prior quarter and ahead of analyst estimates of roughly 40%. Azure annual revenue exceeded $100 billion for the first time, making it the second-largest cloud platform behind Amazon Web Services.

The Intelligent Cloud segment posted $39.3 billion in revenue, up 32%, making it the company’s strongest unit in the quarter. Microsoft’s commercial remaining performance obligation, a measure of contracted future revenue, reached $678 billion, up from $627 billion the prior quarter.

CFO Amy Hood attributed the acceleration to efficiency gains across Microsoft’s CPU and GPU fleet. “Demand continues to exceed available supply,” Hood told investors on the earnings call. “Process improvements also reduced the lead time for bringing new capacity online. Because of the supply-demand imbalance, these efficiency gains were quickly monetized within the quarter.”

Copilot Seats Jump

Microsoft 365 Copilot surpassed 30 million paid seats in the quarter, up from 20 million the prior quarter and ahead of analyst expectations of 26.9 million. Net paid-seat additions more than doubled sequentially.

CEO Satya Nadella said hundreds of enterprise customers have purchased millions of seats for high-end E7 productivity software bundles. GitHub Copilot, the company’s coding assistant, now counts 50 million users.

“This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us,” Nadella said.

Capex Comes in Below Estimates

Capital expenditure for the quarter reached $41 billion, below an anticipated $42 billion. About two-thirds of that spending went toward short-lived assets, primarily CPUs and GPUs. Finance leases totaled $5.6 billion and cash spending on property and equipment reached $35.8 billion.

Hood told investors that capital expenditure expectations for calendar year 2026 remain unchanged. An accounting change will bring that guidance closer to approximately $175 billion, but Hood said the underlying expectations are unchanged, a contrast to several cloud competitors that have raised spending forecasts in recent quarters.

Microsoft added 31 new data centers across five continents during Q4, bringing the full-year total to 88 new facilities. The company added one gigawatt of capacity during the quarter and says it remains on track to roughly double overall capacity within two years.

Segment Results and Outlook

Productivity and Business Processes revenue came in at $37.8 billion, up 14%. The More Personal Computing segment, which includes Bing, Surface, Windows, and Xbox, posted $12.85 billion, down 4.4%. Xbox content and services revenue fell 10% year over year, hurt by a strong prior-year comparable and impairment charges.

Microsoft also reported a $3.2 billion gain from its investment in Anthropic. Full-year earnings per share reached $17.95, up 32% from fiscal 2025.

On the earnings call, Nadella positioned Microsoft’s own MAI models and Copilot agents as a lower-cost alternative to OpenAI and Anthropic, two AI labs in which Microsoft holds stakes. The company issued a strong forecast for fiscal Q1 2027, which helped push the after-hours stock gain past 8%.

Read more: Microsoft’s stock rises 9% on strong Azure revenue growth and steady capex spending