REDMOND, Wash.: Microsoft reported stronger than expected financial results for the fourth quarter of fiscal 2026, driven by robust growth in its cloud and artificial intelligence businesses, with Azure annual revenue surpassing $100 billion for the first time.
The technology giant posted fourth-quarter revenue of $90 billion, an 18% increase from a year earlier, while operating income rose 18% to $40.6 billion. Net income climbed 31% to $35.8 billion on a GAAP basis, and diluted earnings per share increased 32% to $4.81.
Microsoft said quarterly results were boosted by a $3.2 billion gain from its investment in Anthropic and lower-than-expected retirement program costs, partially offset by severance and impairment charges related to its Xbox business. These factors added $0.27 to diluted earnings per share.
The company’s Microsoft Cloud business generated $59.3 billion in revenue, up 27% year over year. Revenue from the Intelligent Cloud segment rose 32% to $39.3 billion, fueled by 43% growth in Azure and other cloud services.
Meanwhile, the Productivity and Business Processes division grew 14% to $37.8 billion, supported by gains in Microsoft 365 Commercial and LinkedIn. The More Personal Computing segment declined 4% to $12.9 billion, reflecting weaker sales of Windows devices and lower Xbox content and services revenue.
For the full fiscal year 2026, Microsoft reported $331.8 billion in revenue, up 18%, while net income increased 31% to $133.7 billion. The company also returned $10.2 billion to shareholders during the quarter through dividends and share buybacks.
More read, Microsoft to cut 4,800 jobs, overhaul Xbox unit
Microsoft Chairman and CEO Satya Nadella said the company continues to improve the economics of AI adoption for customers, noting that Azure exceeded $100 billion in annual revenue and Microsoft 365 Copilot now has more than 30 million paid seats, highlighting growing demand for the company’s AI-powered products.
