Microsoft posted strong results for its quarterly earnings on Wednesday, beating expectations and showing strong growth in its cloud computing platform and a boost in paid AI users.
The Redmond, Washington, company earned $90 billion, or $4.81 per share, in the April-June quarter. That is up 18% from the same period a year earlier. Analysts surveyed by FactSet Research had expected the company to earn $4.24 per share on revenue of $87.62 billion this quarter.
Microsoft Cloud revenue was $59.3 billion this quarter, up 27% year-over-year. That growth reflects the demand across Microsoft's cloud computing platform Azure, as well as its first-party AI applications and services. Azure and other cloud services revenue increased 43%.
For the full fiscal year, which closed out at the end of June, the company brought in $331.8 billion in revenue.
"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,” CEO Satya Nadella said in a statement Wednesday.
The concurrent Azure and Copilot growth indicate that Microsoft is "winning on both fronts,” Michael J. Wolf, founder and CEO of Activate Consulting said in a statement. Microsoft is doing so by "supplying the cloud infrastructure for enterprise AI while monetizing the AI tools embedded in the products workers use every day.”
Investors had been looking for evidence that Azure and Copilot, Microsoft's flagship AI assistant, could eventually produce returns as concerns about high AI spending have steadily grown across the industry.
Chief financial officer Amy Hood told investors on a call that the company’s capital expenditures and investment expectations remain unchanged for the 2026 calendar year. An accounting change will bring that guidance closer to approximately $175 billion, Hood said, but in practice, the expectations remain "unchanged.” This move marks a break from competitors that have been steadily increasing their spending forecasts.
Hood said earlier this year that the company expects to invest $190 billion in capital expenditures in 2026, a figure that includes approximately $25 billion from the impact of higher component pricing. Microsoft's capital expenditures were $41 billion this quarter.
Bryan Hayes, an investment strategist at Zacks Investment Research, said in a statement that "for the first time in three quarters, the market appears willing to grant that the spending is buying something real.”
"We remain very confident in the long-term return on these investments, given these strong demand signals, the increasing product usage we’ve seen and the efficiencies that we’re driving across the platform,” said Danielle Criste, Microsoft's director of investor relations, in an interview.
Microsoft’s shares rose about 9% to $426.03 in after-hours trading.
