Microsoft reports record revenue as cloud and AI drive strong growth
Microsoft has reported quarterly revenue of $90 billion after continued growth in its cloud and artificial intelligence businesses, with Azure revenue surpassing $100 billion for t
By The Register
Microsoft has reported another quarter of strong financial growth, with its cloud computing and artificial intelligence businesses continuing to drive higher revenue and profits.
For the three months ending 30 June, the technology company recorded $90 billion in revenue, an increase of 18% compared with the same period a year earlier. Operating income rose 18% to $40.6 billion, while net income increased 31% to $35.8 billion. Diluted earnings per share reached $4.81, up 32% year on year.
Microsoft’s cloud division remained the company’s biggest growth engine. Revenue from Microsoft Cloud reached $59.3 billion, up 27%, while Azure revenue increased 43% during the quarter. The company also confirmed that Azure generated more than $100 billion in revenue over the full 2026 financial year, the first time it has reached that milestone.
Demand for Microsoft’s artificial intelligence services also continued to grow. The company said paid seats for Microsoft 365 Copilot increased by around 50% compared with the previous quarter, with the total now exceeding 30 million. While that represents rapid growth, it remains a relatively small proportion of Microsoft’s wider commercial Microsoft 365 customer base, suggesting there is still significant room for further adoption.
For the full financial year ending 30 June 2026, Microsoft reported $331.8 billion in revenue, up 18% from the previous year. Operating income reached $155.2 billion, while net income rose to $133.7 billion, underlining the scale of the company’s continued expansion.
The results also highlighted Microsoft’s continued investment in artificial intelligence infrastructure. Capital expenditure reached $41 billion during the quarter, an increase of 70% compared with the previous year. Chief Financial Officer Amy Hood said around two-thirds of that spending related to short-lived assets such as processors and graphics chips needed to support growing demand for cloud and AI services.
Investors have closely monitored spending on AI infrastructure across the technology sector, particularly as companies commit billions of dollars to expanding data centres and computing capacity. Despite those concerns, Microsoft’s strong revenue growth and expanding order book suggest customer demand for cloud and AI services continues to outpace its investment. The company also reported that its commercial remaining performance obligation—a measure of contracted future revenue—rose 84% to $678 billion, providing further visibility over future growth.
Microsoft’s latest results reinforce its position as one of the biggest beneficiaries of the global shift towards cloud computing and generative AI. Investors will now be watching whether the company can maintain that growth while continuing to balance substantial infrastructure investment with long-term profitability.