Microsoft's cloud brings rain of revenue but modest M365 AI revenue harvest
Capex spending? What? Me worry?
Microsoft on Wednesday reported $90 billion in revenue for the quarter ended June 30, an increase of 18 percent, lifting its stock more than 7 percent in after hours trading.The cash intake was more than Wall Street analysts anticipated, and showed up where it counted – the company's cloud business and AI services. Microsoft Cloud revenue reached $59.3 billion, up 27 percent year-over-year, and its Azure business revenue grew 43 percent.Meanwhile, Microsoft 365 Copilot's paid user base increased 50 percent from the previous quarter.
"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, in a statement celebrating the results for the final quarter of Microsoft's 2026 fiscal year.
"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."Thirty million out of an estimated 450 million Microsoft 365 commercial customers isn't an overwhelming vote of confidence in Copilot AI, but it's something, particularly given Microsoft's imposition of usage-based billing on top of seat-based charges.Operating income for the quarter came to $40.6 billion (+18 percent). And net income was $35.8 billion (+31 percent), for diluted earnings per share of $4.81 (+32 percent).Microsoft's investment in Anthropic accounted for a gain of about $3.2 billion this quarter.
