Microsoft Q4 Earnings: Revenue $90B, Up 18%

Microsoft (Nasdaq: MSFT) reported Q4 FY2026 revenue of $90.0 billion, up 18% year over year (17% in constant currency), with Microsoft Cloud revenue rising 27% to $59.3 billion.

Rhea-AI Summary

Microsoft (Nasdaq: MSFT) reported Q4 FY2026 revenue of $90.0 billion, up 18% year over year (17% in constant currency), with Microsoft Cloud revenue rising 27% to $59.3 billion. GAAP net income for the quarter was $35.8 billion, up 31%, and GAAP diluted EPS increased 32% to $4.81. Operating income grew 18% to $40.6 billion.

Microsoft said discrete items added $0.27 to diluted EPS versus prior guidance, mainly from a $3.2 billion gain on its Anthropic investment and lower Voluntary Retirement Program costs, partly offset by severance and Xbox impairment charges. Azure and other cloud services revenue grew 43%, while commercial remaining performance obligation rose 84% to $678 billion. Azure surpassed $100 billion in annual revenue, and Microsoft 365 Copilot exceeded 30 million paid seats.

For FY2026, revenue was $331.8 billion (+18%), operating income $155.2 billion (+21%), GAAP net income $133.7 billion (+31%), and GAAP diluted EPS $17.95 (+32%). Microsoft generated Q4 operating cash flow of $55.4 billion and returned $10.2 billion to shareholders in the quarter.

Positive

• Q4 revenue $90.0B, up 18% YoY
• Q4 GAAP diluted EPS $4.81, up 32% YoY
• Microsoft Cloud revenue up 27% to $59.3B in Q4
• Azure and other cloud services revenue up 43% in Q4
• Commercial remaining performance obligation up 84% to $678B
• FY2026 GAAP net income $133.7B, up 31%
• Q4 operating cash flow $55.4B; FY2026 $182.9B
• Capital returns $10.2B to shareholders in Q4

Negative

• More Personal Computing revenue down 4% to $12.9B in Q4
• Windows OEM and Devices revenue down 7% in Q4
• Xbox content and services revenue down 10% in Q4
• Discrete EPS benefit $0.27 from items including a $3.2B investment gain

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Microsoft Corp. (Nasdaq: MSFT) reported fiscal fourth-quarter revenue of $90.0 billion, up 18% year over year, as Microsoft Cloud revenue increased 27% to $59.3 billion. For the quarter ended June 30, 2026, GAAP net income rose 31% to $35.8 billion, while GAAP diluted earnings per share increased 32% to $4.81.

Microsoft Q4 FY2026 Financial Snapshot

Metric	Q4 FY2026	Year-over-year change
Revenue	$90.0 billion	18%, or 17% in constant currency
Operating income	$40.6 billion	18%
GAAP net income	$35.8 billion	31%
Non-GAAP net income	$35.3 billion	22%
GAAP diluted EPS	$4.81	32%
Non-GAAP diluted EPS	$4.74	23%

Microsoft said several discrete items provided a combined $0.27 benefit to diluted EPS compared with the guidance it issued on April 29, 2026. The items included a $3.2 billion gain on its Anthropic investment and lower-than-expected Voluntary Retirement Program expenses, partly offset by severance expense and Xbox impairment charges. After adjusting for those items, the company said revenue, operating income, and diluted EPS exceeded its expectations.

Azure Growth and Microsoft Cloud Results

Azure and other cloud services revenue increased 43% during the quarter. Commercial remaining performance obligation increased 84% to $678 billion.

Microsoft Chairman and CEO Satya Nadella said Azure surpassed $100 billion in annual revenue for the first time during fiscal 2026. He also said Microsoft 365 Copilot had more than 30 million paid seats. Chief Financial Officer Amy Hood highlighted the 27% growth in Microsoft Cloud revenue.

Microsoft Segment Performance

Productivity and Business Processes revenue was $37.8 billion, an increase of 14%. Microsoft 365 Commercial cloud revenue grew 14% as reported, or 16% after adjusting for a prior-year comparison that included two percentage points of in-period revenue recognition. Microsoft 365 Consumer cloud revenue increased 24%, LinkedIn revenue rose 12%, and Dynamics 365 revenue increased 13%.

Intelligent Cloud revenue reached $39.3 billion, up 32%, or 31% in constant currency. Azure and other cloud services produced the segment's highest disclosed growth rate at 43%.

More Personal Computing revenue declined 4% to $12.9 billion, or 5% in constant currency. Windows OEM and Devices revenue decreased 7%, while Xbox content and services revenue fell 10%. Search advertising revenue excluding traffic acquisition costs increased 10%, or 9% in constant currency.

Full-Year Microsoft Results

For fiscal 2026, Microsoft reported revenue of $331.8 billion, up 18%, and operating income of $155.2 billion, up 21%. GAAP net income increased 31% to $133.7 billion, and GAAP diluted EPS rose 32% to $17.95.

On a non-GAAP basis, full-year net income increased 22% to $128.8 billion, while diluted EPS increased 22% to $17.28. Microsoft's non-GAAP measures exclude the impact of its OpenAI investments. The company said those investments increased fiscal 2026 net income by $4.96 billion and diluted EPS by $0.67, including fourth-quarter benefits of $480 million and $0.07, respectively.

Microsoft generated $55.4 billion in operating cash flow during the fourth quarter and $182.9 billion for the full year. Additions to property and equipment were $35.8 billion in the quarter and $115.9 billion for the year. The company returned $10.2 billion to shareholders through dividends and share repurchases during the fourth quarter.

Guidance and Forward-Looking Information

Microsoft said it would provide forward-looking guidance during its July 29 earnings conference call. The company cautioned that forward-looking statements depend on current expectations and assumptions and may differ materially from actual results. Its disclosed risk factors include competition, the return on cloud and AI investments, infrastructure capacity, cybersecurity, privacy, regulation, legal claims, economic and geopolitical conditions, foreign exchange, and employee retention.

The company said its non-GAAP and constant-currency measures supplement, rather than replace, results prepared under generally accepted accounting principles. Constant-currency comparisons apply prior-period exchange rates to help separate business performance from foreign-exchange movements.

Source: Microsoft fiscal 2026 fourth-quarter earnings release

This StockTitan article is an independent summary based solely on information provided by Microsoft on July 29, 2026. It is not authored, sponsored, or endorsed by Microsoft. The content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Stock Titan and its writers make no representations as to the accuracy, completeness, or timeliness of the source information. Readers should conduct their own due diligence before making investment decisions.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How did Microsoft (MSFT) perform financially in Q4 FY2026?

Microsoft reported Q4 FY2026 revenue of $90.0 billion, up 18% year over year. According to Microsoft, GAAP net income was $35.8 billion (+31%) and GAAP diluted EPS reached $4.81 (+32%), with operating income of $40.6 billion (+18%).

What were Microsoft Cloud and Azure results in Q4 FY2026 for MSFT?

Microsoft Cloud revenue grew 27% to $59.3 billion in Q4 FY2026. According to Microsoft, Azure and other cloud services revenue increased 43%, and commercial remaining performance obligation expanded 84% to $678 billion, highlighting strong cloud demand and backlog growth.

What were Microsoft’s full-year FY2026 revenue and earnings (MSFT)?

For FY2026, Microsoft reported revenue of $331.8 billion, up 18% year over year. According to Microsoft, GAAP net income rose to $133.7 billion (+31%), and GAAP diluted EPS increased to $17.95 (+32%), reflecting broad-based profitability growth.

How did Microsoft’s OpenAI and Anthropic investments affect FY2026 MSFT results?

Microsoft’s non-GAAP measures exclude OpenAI investment impacts, which increased FY2026 net income by $4.96 billion and diluted EPS by $0.67. According to Microsoft, Q4 benefits were $480 million and $0.07, while a $3.2 billion Anthropic gain added to Q4 EPS versus guidance.

How did Microsoft’s business segments perform in Q4 FY2026 (MSFT)?

Productivity and Business Processes revenue reached $37.8 billion, up 14%, and Intelligent Cloud revenue was $39.3 billion, up 32%. According to Microsoft, More Personal Computing revenue declined 4% to $12.9 billion, with Xbox and Windows OEM and Devices down during the quarter.

What cash flow and shareholder returns did Microsoft (MSFT) report for Q4 FY2026?

Microsoft generated Q4 FY2026 operating cash flow of $55.4 billion. According to Microsoft, it returned $10.2 billion to shareholders through dividends and share repurchases in the quarter, while full-year operating cash flow totaled $182.9 billion.

Did Microsoft provide guidance with its Q4 FY2026 MSFT earnings?

Microsoft said it would provide forward-looking guidance during its July 29, 2026 earnings conference call. According to Microsoft, any forward-looking statements depend on current expectations and listed risk factors, and may differ materially from actual future results.