{"slug": "microsoft-cloud-and-ai-strength-fuels-fourth-quarter-results", "title": "Microsoft Cloud and AI strength fuels fourth quarter results", "summary": "Microsoft Corp. reported fiscal fourth-quarter revenue of $90.0 billion, up 18% year-over-year, with net income of $35.8 billion (GAAP), up 31%, driven by strong cloud and AI demand. Microsoft Cloud revenue reached $59.3 billion, up 27%, and Azure revenue surpassed $100 billion for the fiscal year, while Microsoft 365 Copilot surpassed 30 million paid seats. The company also recorded a $3.2 billion gain from its investment in Anthropic.", "body_md": "**REDMOND, Wash. — July 29, 2026 — **Microsoft Corp. today announced the following results for the quarter ended June 30, 2026, as compared to the corresponding period of last fiscal year:\n\n- Revenue was $90.0 billion and increased 18% (up 17% in constant currency)\n- Operating income was $40.6 billion and increased 18%\n- Net income was $35.8 billion and increased 31% on a GAAP basis, and was $35.3 billion and increased 22% on a non-GAAP basis\n- 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\n- Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below\n\nSeveral discrete items impacted our financial results in the quarter when compared to our forward-looking guidance provided on April 29, 2026, resulting in a benefit of $0.27 on diluted earnings per share. 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. When adjusting for these items, we exceeded expectations across revenue, operating income, and diluted earnings per share.\n\n“We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results,” said Satya Nadella, chairman and chief executive officer of Microsoft. “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.”\n\n“We delivered a strong quarter to close out the fiscal year, highlighted by Microsoft Cloud revenue of $59.3 billion, up 27% year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.\n\nThe following table adjusts for the impact from investments in OpenAI and reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.\n\nThree Months Ended June 30, | |||||||||||||||\n2026 | 2025 | Percentage Change Y/Y | Percentage Change Y/Y | ||||||||||||\n| ($ in millions, except per share amounts) | As Reported (GAAP) | Impact from OpenAI* | As Adjusted (non-GAAP) | As Reported (GAAP) | Impact from OpenAI* | As Adjusted (non-GAAP) | GAAP | Constant Currency | Net Impact from OpenAI* | Non-GAAP | Non-GAAP Constant Currency | ||||\nNetIncome | $35,766 | $(480) | $35,286 | $27,233 | $1,575 | $28,808 | 31% | 31% | $(2,055) | 22% | 22% | ||||\nDiluted Earnings per Share | $4.81 | $(0.07) | $4.74 | $3.65 | $0.21 | $3.86 | 32% | 32% | $(0.28) | 23% | 23% | ||||\n\n*Impact from OpenAI adjusts for the impact from investments in OpenAI\n\n**Business Highlights**\n\nMicrosoft Cloud revenue was $59.3 billion and increased 27%, and commercial remaining performance obligation increased 84% to $678 billion.\n\nRevenue in Productivity and Business Processes was $37.8 billion and increased 14%, with the following business highlights:\n\n- Microsoft 365 Commercial cloud revenue increased 16% when adjusted for the prior year comparable that benefited from 2 points of in-period revenue recognition. On a reported basis, Microsoft 365 Commercial cloud revenue increased 14%.\n- Microsoft 365 Consumer cloud revenue increased 24% (up 22% in constant currency)\n- LinkedIn revenue increased 12% (up 10% in constant currency)\n- Dynamics 365 revenue increased 13% (up 12% in constant currency)\n\nRevenue in Intelligent Cloud was $39.3 billion and increased 32% (up 31% in constant currency), with the following business highlights:\n\n- Azure and other cloud services revenue increased 43%\n\nRevenue in More Personal Computing was $12.9 billion and decreased 4% (down 5% in constant currency), with the following business highlights:\n\n- Windows OEM and Devices revenue decreased 7%\n- XBOX content and services revenue decreased 10%\n- Search advertising revenue excluding traffic acquisition costs increased 10% (up 9% in constant currency)\n\nMicrosoft returned $10.2 billion to shareholders in the form of dividends and share repurchases in the fourth quarter of fiscal year 2026.\n\n**Fiscal Year 2026 Results**\n\nMicrosoft Corp. today announced the following results for the fiscal year ended June 30, 2026, as compared to the corresponding period of last fiscal year:\n\n- Revenue was $331.8 billion and increased 18% (up 16% in constant currency)\n- Operating income was $155.2 billion and increased 21% (up 19% in constant currency)\n- Net income was $133.7 billion and increased 31% on a GAAP basis, and increased 22% (up 20% in constant currency) on a non-GAAP basis\n- Diluted earnings per share was $17.95 and increased 32% on a GAAP basis, and increased 22% (up 21% in constant currency) on a non-GAAP basis\n- Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below\n\nThe following table adjusts for the impact from investments in OpenAI and reconciles our financial results reported in accordance with GAAP to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.\n\nTwelve Months Ended June 30, | |||||||||||||||\n2026 | 2025 | Percentage Change Y/Y | Percentage Change Y/Y | ||||||||||||\n| ($ in millions, except per share amounts) | As Reported (GAAP) | Impact from OpenAI* | As Adjusted (non-GAAP) | As Reported (GAAP) | Impact from OpenAI* | As Adjusted (non-GAAP) | GAAP | Constant Currency | Net Impact from OpenAI* | Non-GAAP | Non-GAAP Constant Currency | ||||\nNetIncome | $133,749 | $(4,963) | $128,786 | $101,832 | $3,620 | $105,452 | 31% | 30% | $(8,583) | 22% | 20% | ||||\nDiluted Earnings per Share | $17.95 | $(0.67) | $17.28 | $13.64 | $0.49 | $14.13 | 32% | 30% | $(1.16) | 22% | 21% | ||||\n\n*Impact from OpenAI adjusts for the impact from investments in OpenAI\n\n**Business Outlook**\n\nMicrosoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.\n\n**Quarterly Highlights, Product Releases, and Customer Stories**\n\nEvery quarter Microsoft delivers hundreds of products, services, and enhancements. These releases are driven by years of significant research and development investments, to empower customers with greater productivity, security, and differentiated value.\n\nThis momentum is reflected in stories that showcase how our technology is [shaping industries and driving customer success](https://blogs.microsoft.com/blog/2026/07/28/looking-back-on-microsofts-fy26-from-ai-experimentation-to-frontier-transformation/)[. We share innovation updates on our product blogs across ][Azure](https://azure.microsoft.com/en-us/blog/), [Microsoft 365](https://www.microsoft.com/en-us/microsoft-365/blog/), and more on our [Official Microsoft blog](https://blogs.microsoft.com/).\n\n**Webcast Details**\n\nSatya Nadella, chairman and chief executive officer, Amy Hood, executive vice president and chief financial officer, Alice Jolla, chief accounting officer, Brian DeFoe, deputy general counsel and corporate secretary, and Jonathan Neilson, vice president of investor relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at [http://www.microsoft.com/en-us/investor](http://www.microsoft.com/en-us/investor). Participants can also dial into the conference call at (877) 407-0666 or +1 (201) 689-8023 for international, no password required. The webcast will be available for replay through the close of business on July 29, 2027.\n\n**Non-GAAP Definition**\n\n*Impact from investments in OpenAI. *In fiscal year 2026, net income and diluted earnings per share were impacted by net gains from investments in OpenAI, which resulted in an increase in net income and diluted earnings per share of $480 million and $0.07, respectively, in the fourth quarter, and $4,963 million and $0.67, respectively, for the full fiscal year. In fiscal year 2025, net income and diluted earnings per share were impacted by net losses from investments in OpenAI, which resulted in a decrease in net income and diluted earnings per share of $1,575 million and $0.21, respectively, in the fourth quarter, and $3,620 million and $0.49, respectively, for the full fiscal year.\n\nMicrosoft has provided non-GAAP financial measures related to the impact from investments in OpenAI to aid investors in better understanding our performance. Microsoft believes these non-GAAP measures assist investors by providing additional insight into its operational performance and help clarify trends affecting its business. For comparability of reporting, management considers non-GAAP measures in conjunction with GAAP financial results in evaluating business performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.\n\n**Constant Currency**\n\nMicrosoft presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft has provided this non-GAAP financial information to aid investors in better understanding our performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.\n\n**Financial Performance Constant Currency Reconciliation**\n\nThree Months Ended June 30, | |||||||||||\n| ($ in millions, except per share amounts) | 2026 | | 2025 | | Percentage Change Y/Y | | Percentage Change Y/Y | ||||\nAs Reported (GAAP) | As Adjusted (non-GAAP) | | As Reported (GAAP) | As Adjusted (non-GAAP) | | GAAP | Non- GAAP | Constant Currency Impact | Constant Currency | Non-GAAP Constant Currency | |\nRevenue | $90,007 | – | | $76,441 | – | | 18% | – | $391 | 17% | – |\nOperatingIncome | $40,603 | – | | $34,323 | – | | 18% | – | $269 | 18% | – |\nNet Income | $35,766 | $35,286 | | $27,233 | $28,808 | | 31% | 22% | $40 | 31% | 22% |\nDilutedEarnings per Share | $4.81 | $4.74 | $3.65 | $3.86 | | 32% | 23% | $0.01 | 32% | 23% |\n\nTwelve Months Ended June 30, | |||||||||||\n| ($ in millions, except per share amounts) | 2026 | | 2025 | | Percentage Change Y/Y | | Percentage Change Y/Y | ||||\nAs Reported (GAAP) | As Adjusted (non-GAAP) | | As Reported (GAAP) | As Adjusted (non-GAAP) | | GAAP | Non- GAAP | Constant Currency Impact | Constant Currency | Non-GAAP Constant Currency | |\nRevenue | $331,839 | – | | $281,724 | – | | 18% | – | $4,445 | 16% | – |\nOperatingIncome | $155,237 | – | | $128,528 | – | | 21% | – | $2,896 | 19% | – |\nNet Income | $133,749 | $128,786 | | $101,832 | $105,452 | | 31% | 22% | $1,772 | 30% | 20% |\nDilutedEarnings per Share | $17.95 | $17.28 | $13.64 | $14.13 | | 32% | 22% | $0.24 | 30% | 21% |\n\n**Segment Revenue Constant Currency Reconciliation**\n\nThree Months Ended June 30, | |||||||\n| ($ in millions) | 2026 | | 2025 | Percentage Change Y/Y | Constant Currency Impact | Percentage Change Y/Y | |\nAs Reported (GAAP) | | As Reported (GAAP) | GAAP | Constant Currency | |||\nProductivity and Business Processes | $37,847 | $33,112 | 14% | $244 | 14% | ||\nIntelligent Cloud | $39,306 | $29,878 | 32% | $80 | 31% | ||\nMore Personal Computing | $12,854 | $13,451 | (4)% | $67 | (5)% |\n\n**Selected Product and Service Information Constant Currency Reconciliation **\n\nThree Months Ended June 30, 2026 | |||\nPercentage Change Y/Y (GAAP) | Constant Currency Impact | Percentage Change Y/Y Constant Currency | |\nMicrosoft Cloud revenue | 27% | 0% | 27% |\nCommercial remaining performance obligation | 84% | 0% | 84% |\nMicrosoft 365 Commercial cloud revenue | 14% | 0% | 14% |\nMicrosoft 365 Consumer cloud revenue | 24% | (2)% | 22% |\nLinkedIn revenue | 12% | (2)% | 10% |\nDynamics 365 revenue | 13% | (1)% | 12% |\nAzure and other cloud services revenue | 43% | 0% | 43% |\nWindows OEM and Devices revenue | (7)% | 0% | (7)% |\nXBOX content and services revenue | (10)% | 0% | (10)% |\nSearch advertising revenue excluding traffic acquisition costs | 10% | (1)% | 9% |\n\n**About Microsoft**\n\nMicrosoft (Nasdaq “MSFT” @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers. The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more.\n\n**Forward-Looking Statements**\n\nStatements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:\n\n- intense competition in all of our markets that could adversely affect our results of operations;\n- substantial investments in cloud and AI strategy that depend on customer demand, technological developments, competitive dynamics, and regulatory condition;\n- development, delivery, and maintenance of competitive cloud-based and AI products and services that achieve broad customer adoption and sustainable revenue growth;\n- significant investments in products and services that may not achieve expected returns;\n- acquisitions, joint ventures, and strategic alliances that could have an adverse effect on our business;\n- cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position;\n- disclosure and misuse of personal data that could cause liability and harm to our reputation;\n- the possibility that we may not be able to protect information in our products and services from use by others;\n- abuse of our platforms that may harm our reputation or user engagement;\n- products and services, how they are used by customers, and how third-party products and services interact with them, presenting security, privacy, and execution risks;\n- issues about the development, deployment, and use of AI that may result in reputational or competitive harm, or liability;\n- inability to develop and expand adequate infrastructure;\n- supply or other quality problems;\n- excessive outages, disruptions, or capacity constraints of our services if we fail to maintain an adequate operations infrastructure or secure resources necessary to support it;\n- potential consequences of new, existing, and evolving legal and regulatory requirements;\n- claims against us that could result in adverse outcomes in legal disputes;\n- uncertainties relating to our business with government customers;\n- additional tax liabilities;\n- an inability to protect and utilize our intellectual property may harm our business and operating results;\n- claims that Microsoft has infringed the intellectual property rights of others;\n- damage to our reputation or our brands that may harm our business and results of operations;\n- adverse economic or market conditions that could harm our business;\n- catastrophic events or geopolitical conditions that could disrupt our business;\n- exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange; and\n- the dependence of our business on our ability to attract and retain talented employees.\n\nFor more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at [http://www.microsoft.com/en-us/investor](http://www.microsoft.com/en-us/investor).\n\nAll information in this release is as of June 30, 2026. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.\n\n**For more information, press only: **\n\nMicrosoft Media Relations, WE Communications for Microsoft, (425) 638-7777, [[email protected]](/cdn-cgi/l/email-protection#295b5b5d695e4c045e465b454d5e404d4c074a4644)\n\n**For more information, financial analysts and investors only: **\n\nJonathan Neilson, Vice President, Investor Relations, (425) 706-4400\n\nNote to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at [http://www.microsoft.com/news](http://www.microsoft.com/news). Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at [http://www.microsoft.com/en-us/investor](http://www.microsoft.com/en-us/investor)[.]\n\n[English (United States)](https://www.microsoft.com/en-us/locale)\n\n[Consumer Health Privacy](https://go.microsoft.com/fwlink/?linkid=2259814)\n\n[Sitemap](https://www.microsoft.com/en-us/sitemap1.aspx)\n\n[Contact Microsoft](https://support.microsoft.com/contactus)\n\n[Privacy](https://go.microsoft.com/fwlink/?LinkId=521839)\n\n[Manage cookies](#)\n\n[Terms of use](https://go.microsoft.com/fwlink/?LinkID=206977)\n\n[Trademarks](https://go.microsoft.com/fwlink/?linkid=2196228)\n\n[Safety & eco](https://go.microsoft.com/fwlink/?linkid=2196227)\n\n[Recycling](https://www.microsoft.com/en-us/legal/compliance/recycling)\n\n[About our ads](https://choice.microsoft.com)", "url": "https://wpnews.pro/news/microsoft-cloud-and-ai-strength-fuels-fourth-quarter-results", "canonical_source": "https://news.microsoft.com/source/2026/07/29/microsoft-cloud-and-ai-strength-fuels-fourth-quarter-results-4/", "published_at": "2026-07-29 20:25:10+00:00", "updated_at": "2026-07-31 16:38:12.975763+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-products"], "entities": ["Microsoft Corp.", "Satya Nadella", "Amy Hood", "Azure", "Microsoft 365 Copilot", "Anthropic", "OpenAI", "LinkedIn"], "alternates": {"html": "https://wpnews.pro/news/microsoft-cloud-and-ai-strength-fuels-fourth-quarter-results", "markdown": "https://wpnews.pro/news/microsoft-cloud-and-ai-strength-fuels-fourth-quarter-results.md", "text": "https://wpnews.pro/news/microsoft-cloud-and-ai-strength-fuels-fourth-quarter-results.txt", "jsonld": "https://wpnews.pro/news/microsoft-cloud-and-ai-strength-fuels-fourth-quarter-results.jsonld"}}