FY26 Q4 - Press Releases - Investor Relations - Microsoft

Microsoft Cloud and AI Strength Fuels Fourth Quarter Results

REDMOND, Wash. — July 29, 2026 — Microsoft Corp. today announced the following results for the quarter ended June 30, 2026, as compared to the corresponding period of last fiscal year:

·        Revenue was $90.0 billion and increased 18% (up 17% in constant currency)

·        Operating income was $40.6 billion and increased 18%

·        Net 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

·        Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below

Several 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. These 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.

“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. “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.”

 “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.

The following table adjusts for the impact from investments in OpenAI and reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

Three Months Ended June 30,
	2026				2025				Percentage Change Y/Y				Percentage Change Y/Y
($ in millions, except per share amounts)	As Reported (GAAP)	Impact from OpenAI*	As Adjusted (non-GAAP)		As Reported (GAAP)	Impact from OpenAI*	As Adjusted (non-GAAP)		GAAP	Constant Currency	Net Impact from OpenAI*			Non-GAAP	Non-GAAP Constant Currency
Net Income	$35,766	$(480)	$35,286		$27,233	$1,575	$28,808		31%	31%	$(2,055)			22%	22%
Diluted  Earnings per Share	$4.81	$(0.07)	$4.74		$3.65	$0.21	$3.86		32%	32%	$(0.28)			23%	23%

*Impact from OpenAI adjusts for the impact from investments in OpenAI 

Business Highlights

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:

·        Microsoft 365 Commercial cloud revenue increased 16% when adjusted for the prior year comparable that benefited from 2 points of in-period revenue recognition. On 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)

Microsoft returned $10.2 billion to shareholders in the form of dividends and share repurchases in the fourth quarter of fiscal year 2026.

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

·        Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below

The following table adjusts for the impact from investments in OpenAI and reconciles our financial results reported in accordance with GAAP to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

Twelve Months Ended June 30,
	2026				2025				Percentage Change Y/Y				Percentage Change Y/Y
($ in millions, except per share amounts)	As Reported (GAAP)	Impact from OpenAI*	As Adjusted (non-GAAP)		As Reported (GAAP)	Impact from OpenAI*	As Adjusted (non-GAAP)		GAAP	Constant Currency	Net Impact from OpenAI*			Non-GAAP	Non-GAAP Constant Currency
Net Income	$133,749	$(4,963)	$128,786		$101,832	$3,620	$105,452		31%	30%	$(8,583)			22%	20%
Diluted  Earnings per Share	$17.95	$(0.67)	$17.28		$13.64	$0.49	$14.13		32%	30%	$(1.16)			22%	21%

*Impact from OpenAI adjusts for the impact from investments in OpenAI 

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Quarterly Highlights, Product Releases, and Customer Stories

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 stor