Earnings review- Microsoft (MSFT) Q2 2026
Muffett Investments
Earnings Watch · Stock Analysis Division
Earnings Review
29 July 2026
◆ Technology · Software & Cloud
Microsoft Corporation
Report Period
Q4 FY2026
Reported: 2026-07-29
Headline
Strong Beat
→ Revenue $90.0B & Azure +43%
Key Metrics at a Glance
Total Revenue
$90.00B
+18.0% YoY (vs $89.4B est)
Non-GAAP EPS
$4.74
+23.0% YoY (vs $4.50 est)
Azure Growth
+43.0%
Crossed $100B Milestone
Microsoft Cloud
$59.30B
+27.0% YoY Total Cloud
Commercial RPO
$678.0B
+84.0% YoY Backlog
Financial Metrics — Detailed Breakdown
| Metric | Q4 FY2026 | Q4 FY2025 | YoY Change | Consensus Est. | vs. Estimate |
|---|---|---|---|---|---|
| Total Revenue | $90,000M | $76,271M | +18.0% | $89,400M | BEAT |
| Intelligent Cloud | $39,300M | $29,770M | +32.0% | $38,600M | BEAT |
| Productivity & Business Processes | $37,800M | $33,160M | +14.0% | $37,200M | BEAT |
| More Personal Computing | $12,900M | $13,440M | -4.0% | $13,100M | MISS |
| Operating Income | $40,600M | $34,400M | +18.0% | $39,800M | BEAT |
| Non-GAAP Diluted EPS | $4.74 | $3.85 | +23.0% | $4.50 | BEAT |
| GAAP Diluted EPS | $4.81 | $3.65 | +31.8% | — | BEAT |
| M365 Copilot Paid Seats | >30.0M | <10.0M | >+200% | — | STRONG |
⚠ Management Highlights & AI Momentum
-
Azure Crosses $100B Historic Milestone Satya Nadella confirmed Azure annual revenue eclipsed $100B for the first time in FY26, with Q4 Azure growth expanding +43% YoY driven by enterprise AI infrastructure demand.
-
Commercial Backlog Explodes to $678B Commercial Remaining Performance Obligation (RPO) accelerated +84% YoY to $678B, reflecting massive long-term enterprise commitments to Microsoft Cloud and Copilot integration.
📈 Stock Performance Context
Ticker
MSFT
NASDAQ Listed
Sector
Software & Cloud
Global Leader
Q4 EPS Beat
+$0.24
$4.74 vs $4.50 est
Q4 Revenue Beat
+$600M
$90.0B vs $89.4B est
Microsoft continues to widen its competitive moat in enterprise AI, combining infrastructure dominance with rapid M365 Copilot monetization.
Our Verdict
Strong Beat
Microsoft closed out FY2026 with a blockbuster Q4 performance, delivering $90.0B in net revenue (+18% YoY) and Non-GAAP EPS of $4.74 (+23% YoY), effortlessly outpacing Wall Street consensus. The highlight of the release was Azure's continuous re-acceleration at +43% YoY growth, pushing total annual Azure revenue above $100B for the first time in company history. With commercial backlog expanding +84% to $678B and over 30 million paid M365 Copilot seats, Microsoft remains the undisputed prime beneficiary of corporate AI adoption.
- Q4 Revenue of $90.0B beat consensus ($89.4B) with +18% overall top-line growth.
- Non-GAAP EPS of $4.74 beat expectations by $0.24 per share (+23% YoY expansion).
- Azure growth accelerated to +43% YoY, surpassing the $100B annual run-rate milestone.
- Commercial RPO surged +84% YoY to $678B, securing multi-year AI revenue visibility.
