Markets MSFT +2.62% JUL 31, 2026

Microsoft Q4 tops $90B as Azure clears $100B annually, capex holds at $41B

MSFT jumped 8% after-hours on a $4.74 adjusted EPS print, 43% Azure growth, and a capex line that came in short of Street fears.

BY HENLEY MARRAST · MARKETS DESK

Microsoft reported $90.01 billion in fiscal Q4 revenue Wednesday after the close, up 18% year over year, with Azure growing 43% and the cloud franchise crossing $100 billion in annual revenue for the first time. Shares jumped roughly 8% in extended trading, an unusually clean reaction to a print that landed above consensus on almost every visible line.

Adjusted diluted EPS came in at $4.74 against an LSEG consensus of $4.24. Included in that number is a $3.2 billion gain from Microsoft’s stake in Anthropic, worth about 33 cents of EPS per Axios, which complicates the headline beat somewhat. The non-GAAP figure also strips out the OpenAI investment, which would’ve shaved 7 cents. GAAP net income was $35.77 billion, up 31% from $27.23 billion a year earlier, or $4.81 per share.

Azure’s acceleration is the story. Growth of 43% is up from 40% in fiscal Q3, and management guided Q1 to 45% at constant currency, ahead of the 41.4% StreetAccount consensus. On the call, Satya Nadella said Azure had “surpassed $100 billion for the first time” in annual revenue, a milestone that puts the segment structurally between AWS and Google Cloud rather than chasing both. Full-year Azure growth was 41%.

Intelligent Cloud posted $39.31 billion, up 31.6% and above StreetAccount’s $38.16 billion, per CNBC. Productivity and Business Processes came in at $37.85 billion, up 14.3%. More Personal Computing was $12.9 billion, down 4%. CFO Amy Hood put Microsoft Cloud at $59.3 billion, up 27%. Microsoft 365 Copilot crossed 30 million paid seats, from more than 20 million in April; GitHub Copilot hit 50 million users.

The capex line is where the market got its real relief. Q4 capital expenditures and finance leases were $41 billion, up 69%. Per reporting from The Wall Street Journal relayed by Quartz, Microsoft trimmed its calendar-2026 capex forecast to roughly $175 billion from about $190 billion, largely by extending the assumed useful life of office and data center properties to 25 years from 15. That’s an accounting decision doing significant narrative work: it flatters near-term margins without slowing physical buildout.

Microsoft returned $10.2 billion to shareholders in the quarter. Guidance for Q1 revenue is $89.85 billion to $90.95 billion.

The read-through is that hyperscaler capex intensity has stopped scaring investors and started being priced as fixed cost, provided the top line keeps compounding at 40-plus. Every quarter Azure holds that line, the depreciation schedule becomes easier to defend.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.