Microsoft Beats Forecasts: 43% Jump in Cloud Revenue
Microsoft recorded $90 billion in revenue for the fourth fiscal quarter, exceeding analyst expectations. The growth was primarily driven by the Azure cloud division, which saw a 43% revenue increase.
Microsoft recorded revenue of $90 billion in the fourth fiscal quarter, compared to the market analysts' forecast of $87.62 billion. Adjusted earnings per share stood at $4.74, surpassing the market forecast of $4.24 per share.
Microsoft's revenue grew by approximately 18% compared to the same quarter last year, which ended on June 30. Net profit totaled $35.77 billion, or $4.81 per share, marking an increase from $27.23 billion ($3.65 per share) in the same quarter last year.
Revenue from the Azure cloud division jumped by 43%, compared to 40% in the previous quarter, exceeding analyst expectations of 40% growth. Microsoft's Intelligent Cloud sector, which includes Azure, recorded revenue of $39.31 billion, an increase of 31.6% year-over-year, outperforming the consensus forecast of $38.16 billion. Microsoft stated that Azure revenue in fiscal year 2026 crossed the $100 billion mark for the first time, trailing Amazon Web Services but remaining larger than Alphabet's Google Cloud.
The company noted that the number of paid seats for the Microsoft 365 Copilot assistant service exceeded 30 million, up from 20 million in July. Microsoft also reported a $3.2 billion profit from its investment in the artificial intelligence laboratory Anthropic.
The sector including Office, Dynamics, and LinkedIn generated revenue of $37.85 billion, an increase of 14.3% and above the consensus forecast of $37.19 billion. Microsoft's "More Personal Computing" segment, which includes Bing, Surface, Windows, and Xbox, contributed $12.85 billion in revenue, a decrease of 4.4% but higher than the consensus forecast of $12.17 billion. Sales of devices and Windows licenses to manufacturers fell by 7%, consistent with Gartner's estimate that personal computer shipments fell by 4.2%.
Capital expenditures totaled $31.9 billion, coming in below forecasts and signaling efficiency in infrastructure investments. Microsoft's market value currently stands at $2.9 trillion.
