Microsoft beat earnings and revenue last quarter, and gave higher-than-expected capital expenditure guidance as it emphasises artificial intelligence investments.
Earnings per share were up 23% year-over-year to US$4.27, above LSEG-compiled estimates of $4.06. Revenue rose 18% to $82.89 billion, passing estimates of $81.39 billion.
“We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era," said chair and CEO Satya Nadella.
“We delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud,” said executive vice president and CFO Amy Hood.
Microsoft Cloud revenue increased 29% to $54.5 billion, with commercial remaining performance obligations soaring 99% to $627 billion.
Productivity and Business Processes revenue was up 17% to $35.0 billion, and Intelligent Cloud Revenue grew 30% to $34.7 billion. Azure and other cloud services, part of Intelligent Cloud, saw revenue rise by 40%.
More Personal Computing revenue fell 1% to $13.2 billion, dragged down by a 5% decrease among Xbox content and services and a 2% drop in Windows OEM and Devices.
The company expects $190 billion in capital expenditures in calendar year 2026, with a $25 billion hit from higher component prices, far above StreetAccount estimates of $154.6 billion. Its capex and finance leases last quarter were up 49% to $31.9 billion.
Revenue will be $86.7-87.8 billion next quarter, Microsoft forecast, with the median below LSEG estimates of $87.53 billion.
Microsoft (NASDAQ: MSFT) shares closed 1.1% lower at $424.46, and dipped a further 0.2% after-hours. Its market capitalisation is $3.15 trillion.



