Microsoft (MSFT) stock jumped 9% in extended trading Wednesday after reporting stronger-than-expected earnings and revenue for its fiscal fourth quarter, along with a breakout disclosure on Azure performance.
For the first time, Microsoft revealed annual revenue from Azure and other cloud services surpassed $75 billion in fiscal 2025, marking a 34% increase year over year.
Here’s how the company performed versus LSEG consensus estimates:
- Earnings per share: $3.65 vs. $3.37 expected
- Revenue: $76.44 billion vs. $73.81 billion expected
Microsoft’s Intelligent Cloud segment, which includes Azure, brought in $29.88 billion, up 26% and ahead of StreetAccount’s $28.92 billion consensus. Azure alone saw 39% revenue growth during the quarter, beating analyst expectations of 34.4% and 35.3%, respectively.
The quarter ending June 30 marked Microsoft’s fastest revenue growth in over three years, rising 18% from $64.7 billion a year ago. Net income reached $27.23 billion, up from $22.04 billion.
CEO Satya Nadella noted on a conference call that “Copilot products, including the Microsoft 365 Copilot for commercial customers and the Copilot consumer assistant in Windows, have 100 million monthly active users.”
Microsoft credited the adoption of Copilot and increased AI investment—including its stake in OpenAI and extensive use of Nvidia chips—with boosting revenue per user across its cloud-based productivity offerings.
The Productivity and Business Processes segment, home to Office and LinkedIn, generated $33.11 billion, beating the $32.12 billion StreetAccount estimate. The More Personal Computing division posted $13.45 billion, up 9% and above the $12.68 billion forecast, with Windows license and device sales up 3%.
Gartner estimates PC shipments rose 4.4% in the quarter.
The company had $24.2 billion in capital expenditures and finance lease acquisitions in Q4—a 27% increase year over year. CFO Amy Hood indicated this trend will continue, though growth will moderate.
“Capital expenditures will grow in the new fiscal year, but more slowly than in the 2025 fiscal year that ended in June,” she said.
Looking ahead, Hood projected fiscal Q1 revenue between $74.7 billion and $75.8 billion. The midpoint, $75.25 billion, exceeds LSEG’s $74.09 billion consensus. Microsoft also expects 37% Azure growth at constant currency, topping the 33.7% StreetAccount estimate.
Hood added that Microsoft sees over $30 billion in fiscal first-quarter capital expenditures and assets acquired through finance leases, representing over 50% annual growth.
“I talked about it, my gosh, in January, and said I thought we’d be in better supply-demand shape by June,” Hood said. “And now I’m saying I hope I’m in better shape by December.”
If capital expenditures remain steady each quarter, Microsoft could spend over $120 billion in fiscal 2026—up 36% from the $100.50 billion consensus, per Visible Alpha.
During the quarter, Microsoft celebrated its 50th anniversary, laid off more than 6,000 employees, expanded GitHub Copilot with task assignment features, and announced that LinkedIn chief Ryan Roslansky would also oversee Office products.
Other expenses totaled $1.71 billion, including losses on investments like OpenAI, compared to $623 million in the previous quarter.
Microsoft shares closed up 22% year to date and climbed past $550 in after-hours trading, lifting its market cap to roughly $4.1 trillion—making it only the second company after Nvidia to reach that valuation milestone.
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