Microsoft Azure Surpasses $100 Billion Revenue
Microsoft has closed fiscal 2026 with strong growth across cloud and artificial intelligence. Most notably, Azure surpassed $100 billion in annual revenue for the first time. Meanwhile, Microsoft reported quarterly revenue of $90 billion, up 18% year over year.
The company also exceeded expectations across several key financial measures. Net income reached $35.8 billion, rising 31% on a GAAP basis. Additionally, diluted earnings per share climbed 32% to $4.81.
Azure growth strengthens Microsoft’s cloud business
Azure and other cloud services revenue increased 43% during the fiscal fourth quarter. That growth exceeded the 39.98% analyst consensus reported by Visible Alpha. Consequently, Azure helped reinforce Microsoft’s position in the competitive cloud market.
Microsoft Cloud revenue also reached $59.3 billion, representing 27% annual growth. Furthermore, the company’s commercial remaining performance obligation rose 84% to $678 billion. The backlog signals substantial contracted demand for Microsoft’s cloud services.
Microsoft is also seeing stronger adoption of its AI products. Microsoft 365 Copilot surpassed 30 million paid seats during the fiscal year. Moreover, CEO Satya Nadella said customers are increasingly focused on turning AI investments into business results.
AI spending continues despite stronger returns
Microsoft continues to spend heavily on data centers and computing infrastructure. Capital expenditure reached $41 billion during the April-June quarter, up more than 70% from the previous year. However, the company expects its spending to remain below some earlier projections.
For calendar 2026, Microsoft expects capital expenditure of about $175 billion. In addition, it forecasts $50 billion in capital spending during the first quarter of fiscal 2027. The company also expects Azure growth of 45% on a constant-currency basis.
Investors responded strongly to the results. Microsoft shares gained more than 15% on July 30, adding nearly $450 billion to the company’s market value in one session. Therefore, the earnings report offered investors stronger evidence that Microsoft’s large AI infrastructure investments are beginning to generate substantial returns.
