Microsoft — 2026Q3 earnings
reported 2026-07-29
EPS $4.74 vs $4.24 est — beat
next session +15.5% (close 2026-07-29 → 2026-07-30)
Source
Press release ↗Summary
A cloud-and-AI-carried close to fiscal 2026: Q4 revenue rose 18% to $90.0 billion, Microsoft Cloud grew 27% to $59.3 billion, and commercial RPO surged 84% to $678 billion, while a $3.2 billion gain on the Anthropic investment flattered GAAP EPS of $4.81 and More Personal Computing declined 4% on softer Windows OEM and Xbox. Nadella flagged two fiscal-year milestones — Azure passing $100 billion in revenue for the first time and Microsoft 365 Copilot passing 30 million paid seats. The call's through-line was demand outrunning supply: 31 new data centers added this quarter (88 for the year), Azure's 43% growth still leaving customer demand above available capacity, and roughly two-thirds of capex going to short-lived assets like CPUs and GPUs.
Earnings call
Earnings call webcast ↗Review
From the report
Microsoft closed fiscal 2026 with fourth-quarter revenue of $90.0 billion, up 18%, as cloud and AI carried the quarter: Microsoft Cloud grew 27% and commercial remaining performance obligation surged 84% to $678 billion. GAAP earnings got a further lift from a $3.2 billion gain on the Anthropic investment, while More Personal Computing declined 4% on softer Windows OEM and Xbox.
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Fourth-quarter revenue was $90.0 billion, up 18% year over year (17% in constant currency). show quote
“Revenue was $90.0 billion and increased 18% (up 17% in constant currency)”
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Diluted earnings per share was $4.81, up 32% on a GAAP basis, and $4.74, up 23% non-GAAP. show quote
“Diluted earnings per share was $4.81 and increased 32% on a GAAP basis, and was $4.74 and increased 23% on a non-GAAP basis”
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Microsoft Cloud revenue reached $59.3 billion, up 27%, while commercial remaining performance obligation jumped 84% to $678 billion. show quote
“Microsoft Cloud revenue was $59.3 billion and increased 27%, and commercial remaining performance obligation increased 84% to $678 billion.”
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Discrete items flattered the quarter versus guidance: a $3.2 billion gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses, partially offset by severance and Xbox impairment charges. show quote
“These include a $3.2 billion gain from our investment in Anthropic and lower-than-expected expenses related to the Voluntary Retirement Program which were partially offset by severance expense and impairment charges in XBOX.”
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CEO Satya Nadella flagged two fiscal-year milestones: Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot passed 30 million paid seats. show quote
“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 to power their AI transformation.”
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From the call
Management's through-line was demand outrunning supply: Satya Nadella detailed 31 new data centers added this quarter (88 for the year), and CFO Amy Hood said Azure's 43% growth came with customer demand still exceeding available capacity, with roughly 2/3 of capital expenditures going to short-lived assets like CPUs and GPUs.
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CEO Satya Nadella said Microsoft added 31 new data centers across 5 continents in the quarter, bringing the fiscal year's total to 88, in response to accelerating demand. show quote
“We added 31 new data centers across 5 continents this quarter, bringing the total to 88 this year as we expand our footprint in response to accelerating demand.”
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CFO Amy Hood said Azure and other cloud services revenue grew 43% against an accelerating prior-year comparison, with customer demand still exceeding available capacity. show quote
“In Azure and other cloud services, revenue grew 43% against a prior year that included accelerating growth. Customer demand continues to exceed available capacity.”
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Amy Hood noted roughly 2/3 of the quarter's capital expenditures went to short-lived assets, primarily CPUs and GPUs. show quote
“Roughly 2/3 of our CapEx was for short-lived assets, primarily CPUs and GPUs as customers increasingly build solutions that leverage both AI and non-AI infrastructure.”
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as of 2026-08-10