This is a very strong set of results and reinforces the view that Microsoft’s massive AI investments are translating into real business growth.
Key highlights:
Revenue: US$90.0 billion, up 18% YoY, beating Wall Street expectations.
EPS: US$4.81, well above analysts’ estimates of US$4.24.
Azure growth: 43% YoY, significantly ahead of expectations (~40%). Management also guided for 45% Azure growth next quarter.
Azure annual revenue: Surpassed US$100 billion for the first time in FY2026, a major milestone.
Microsoft Cloud revenue: US$59.3 billion, up 27% YoY.
Microsoft 365 Copilot: More than 30 million paid users, highlighting strong enterprise AI adoption.
After-hours reaction: Shares surged about 8–9% following the earnings release.
Why the market likes these results
The biggest concern before earnings wasn’t revenue—it was whether Microsoft’s enormous AI infrastructure spending would generate sufficient returns.
This report answered that concern positively:
Azure growth accelerated instead of slowing.
AI products like Copilot continue to gain paying users.
Free cash flow remained healthy despite heavy capital expenditure.
Management maintained a strong growth outlook, suggesting AI demand remains robust.
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