OFICIAL Microsoft Source

Microsoft Cloud and AI strength fuels fourth quarter results

What happened
Based on Microsoft Source · Jul 29, 2026

Microsoft reported a strong fourth quarter, with cloud revenue reaching $59.3 billion, up 27% year-over-year, driven by Azure and AI services. The company also returned $10.2 billion to shareholders through dividends and buybacks.

🚩 Report a correction ↗ Open source
Key points
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These include a $3.2 billion gain from its investment in Anthropic and lower-than-expected expenses related to the Voluntary Retirement Program which the company is partially offset by severance expense and impairment charges in XBOX.
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When adjusting for these items, we exceeded expectations across revenue, operating income, and diluted earnings per share.
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The following table adjusts for the impact from investments in OpenAI and reconciles its financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results.
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Additional information regarding its non-GAAP definition is provided below.
Key numbers
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Microsoft announced its fiscal fourth-quarter results for the year ended June 30, 2026, with cloud revenue totaling $59.
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3 billion, a 27% increase from the prior year.
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The company also reported that Azure revenue surpassed $100 billion for the first time, reflecting sustained demand for its cloud infrastructure and AI capabilities.

Microsoft announced its fiscal fourth-quarter results for the year ended June 30, 2026, with cloud revenue totaling $59.3 billion, a 27% increase from the prior year. The growth was primarily attributed to Microsoft Cloud, which includes Azure and other cloud services. The company also reported that Azure revenue surpassed $100 billion for the first time, reflecting sustained demand for its cloud infrastructure and AI capabilities.

The company highlighted that Microsoft 365 Copilot, its AI assistant for productivity tools, reached over 30 million paid seats. This milestone underscores the adoption of AI-driven solutions among enterprise customers. The results exceeded expectations after adjusting for discrete items such as a $3.2 billion gain from an investment in Anthropic and lower-than-expected expenses related to a voluntary retirement program.

Microsoft returned $10.2 billion to shareholders in the fourth quarter through dividends and share repurchases. The company also reported a 32% increase in Intelligent Cloud revenue, reaching $39.3 billion, driven by demand for AI and cloud services. The commercial remaining performance obligation, a measure of future revenue, rose 84% to $678 billion.

Chairman and CEO Satya Nadella emphasized the company’s focus on improving the cost-to-outcome ratio for customers, enabling businesses to derive measurable results from AI investments. CFO Amy Hood noted the strong quarter, attributing it to Microsoft Cloud’s revenue growth. The company will provide forward-looking guidance during its earnings conference call.

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