Management commentary
Microsoft Cloud and AI Strength Fuels Fourth Quarter Results
Results
Revenue was $90.0 billion and increased 18% (up 17% in constant currency)
Operating income was $40.6 billion and increased 18%
8Net 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
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
2Several 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.
3These 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.
Management commentary
“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.
1“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.”
5“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.
Results
Microsoft Cloud revenue was $59.3 billion and increased 27%, and commercial remaining performance obligation increased 84% to $678 billion.
Revenue in Productivity and Business Processes was $37.8 billion and increased 14%, with the following business highlights:
4Microsoft 365 Commercial cloud revenue increased 16% when adjusted for the prior year comparable that benefited from 2 points of in-period revenue recognition.
6On a reported basis, Microsoft 365 Commercial cloud revenue increased 14%.
Microsoft 365 Consumer cloud revenue increased 24% (up 22% in constant currency)
LinkedIn revenue increased 12% (up 10% in constant currency)
Dynamics 365 revenue increased 13% (up 12% in constant currency)
Revenue in Intelligent Cloud was $39.3 billion and increased 32% (up 31% in constant currency), with the following business highlights:
Azure and other cloud services revenue increased 43%
Revenue in More Personal Computing was $12.9 billion and decreased 4% (down 5% in constant currency), with the following business highlights:
Windows OEM and Devices revenue decreased 7%
XBOX content and services revenue decreased 10%
Search advertising revenue excluding traffic acquisition costs increased 10% (up 9% in constant currency)
Capital return
Microsoft returned $10.2 billion to shareholders in the form of dividends and share repurchases in the fourth quarter of fiscal year 2026.
Results
Fiscal Year 2026 Results
Microsoft Corp. today announced the following results for the fiscal year ended June 30, 2026, as compared to the corresponding period of last fiscal year:
Revenue was $331.8 billion and increased 18% (up 16% in constant currency)
Operating income was $155.2 billion and increased 21% (up 19% in constant currency)
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
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
Outlook
Business Outlook
Quarterly Highlights, Product Releases, and Customer Stories
Management commentary
Every 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.
This momentum is reflected in stories that showcase how our technology is shaping industries and driving customer success .
We share innovation updates on our product blogs across Azure , Microsoft 365 , and more on our Official Microsoft blog .
Results
Impact from investments in OpenAI.
7In 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.
Segment Revenue Constant Currency Reconciliation
Selected Product and Service Information Constant Currency Reconciliation
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