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Q4 revenue was $90 billion, up 18% year-on-year, beating expectations of $81.43 billion.
Microsoft will provide an outlook in its earnings call later in the day.
Microsoft Cloud revenue was $59.3 billion and increased 27%.
Microsoft share price soared 3% after-hours on Wednesday after the company's fourth-quarter earnings soared past expectations owing to strong cloud revenues.
In a statement released on Wednesday, the company announced a 43% increase in Azure cloud-computing revenue for the fiscal fourth quarter, outperforming analysts' average growth projections of around 40%.
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Furthermore, total revenue climbed 18% to reach $90 billion, surpassing the average anticipated forecast of $87.7 billion. Excluding certain items, profit stood at $4.81 per share, which also beat the estimated projection of $4.24 per share, as per estimates from Fiscal.ai.
Microsoft, along with its hyperscaler peers like Amazon and Meta, has been at the forefront of the AI capex buildup in a bid to secure computing power for large data centers.
Microsoft's Capex for the quarter ending June increased. However, Chief Financial Officer Amy Hood said during the company's earnings call that the company's capex forecast for calendar 2026 remains unchanged, after adjusting for an accounting update. The stock jumped on the news, trading up as much as 8% in after-hours trading.
Capital expenditures — a key metric of data center spending — came in at $35.8 billion in the quarter, lower than expectations of $36.14 billion.
MSFT Q4 Earnings: Segment Performance
Microsoft's Productivity and Business Processes division—including LinkedIn, Office, and Dynamics—generated $37.85 billion in revenue, marking a 14.3% increase. Within this segment, the company highlighted that paid seats for its Microsoft 365 Copilot work assistant grew to over 30 million, rising from more than 20 million recorded in July.
Conversely, the More Personal Computing unit—which contains Windows, Xbox, Surface, and Bing—experienced a 4.4% decline, bringing in $12.85 billion in revenue, though this still topped StreetAccount forecasts of $12.17 billion. This downturn reflects a 7% drop in device sales and Windows license shipments to device manufacturers, coinciding with tech researcher Gartner's estimate of a 4.2% contraction in global PC shipments.
In a statement, Microsoft Chief Executive Officer Satya Nadella said the company now has over 30 million paid subscribers for Microsoft 365 Copilot, its Office software AI assistant add-on. This figure is up from around 20 million users just three months prior.
