Microsoft Q4 & Fiscal Year 2026 Earnings Summary:
๐๐จ๐ฌ๐ญ ๐ข๐ฆ๐ฉ๐จ๐ซ๐ญ๐๐ง๐ญ ๐๐ข๐ซ๐ฌ๐ญ: ๐๐ณ๐ฎ๐ซ๐ ๐๐จ๐ง๐ญ๐ข๐ง๐ฎ๐๐ฌ ๐ญ๐จ ๐๐จ๐ฆ๐ข๐ง๐๐ญ๐!
Once again, Azure was the biggest growth driver.
Azure revenue: +39%
Azure AI services contributed 16% points of Azure's growth. Commercial bookings increased 10%, or 18% excluding OpenAI-related timing effects.
Demand for AI infrastructure remains exceptionally strong, and Microsoft continues to benefit more than any other hyperscaler from enterprise AI adoption.
๐๐ ๐๐๐ฆ๐๐ง๐ ๐๐จ๐ง๐ญ๐ข๐ง๐ฎ๐๐ฌ ๐ญ๐จ ๐๐ฑ๐๐๐๐ ๐๐๐ฉ๐๐๐ข๐ญ๐ฒ
Perhaps the most important message of the quarter:
Management stated that AI demand still exceeds available data center capacity.
Microsoft continues investing aggressively in AI infrastructure, GPUs and global data centers, yet customer demand remains ahead of supply. This suggests that AI growth is far from slowing down and that Microsoft still has significant room for expansion.
๐๐จ๐ฆ๐ฆ๐๐ซ๐๐ข๐๐ฅ ๐๐ฅ๐จ๐ฎ๐ ๐ซ๐๐ฆ๐๐ข๐ง๐ฌ ๐๐ฑ๐๐๐ฉ๐ญ๐ข๐จ๐ง๐๐ฅ
Microsoft Cloud generated:
$59.3B revenue
+27% growth
Commercial Remaining Performance Obligation (RPO), Microsoft's contracted future revenue backlog, increased to: $678B
This represents another record and provides tremendous visibility into future revenue growth.
๐๐๐ฌ๐ก ๐ ๐ฅ๐จ๐ฐ & ๐๐๐ฉ๐ข๐ญ๐๐ฅ ๐๐ฅ๐ฅ๐จ๐๐๐ญ๐ข๐จ๐ง
Microsoft once again generated enormous amounts of cash.
FY2026 highlights:
Operating Cash Flow: $133.6B
Capital Expenditures: $93.1B
Cash returned to shareholders: $65.8B
$31.4B share repurchases
$34.3B dividends
๐๐ฎ๐ข๐๐๐ง๐๐
Outlook remains extremely strong. Management guided for another quarter of robust growth, supported by:
continued Azure acceleration,
expanding AI workloads,
growing enterprise Copilot adoption,
and ongoing demand that still exceeds available AI capacity.
๐ ๐จ๐ซ ๐ฎ๐ฌ ๐ข๐ฆ๐ฉ๐จ๐ซ๐ญ๐๐ง๐ญ: ๐๐ข๐ฏ๐ข๐๐๐ง๐
Microsoft announced its annual dividend increase in September 2025.
Quarterly dividend: $0.83 to $0.91
Increase: +9.6%
So the next annual increase is expected in September 2026. And the Payout Ratio based on FY2026 EPS and the current annual dividend of $3.64, is approximately: ~34%
This remains one of the most conservative payout ratios among mega-cap technology companies.
๐๐๐ซ๐ฌ๐จ๐ง๐๐ฅ ๐๐ฎ๐ฆ๐ฆ๐๐ซ๐ฒ
What can I say? Microsoft is proving once again that it's a must-have investment. It delivered one of the strongest quarters of the entire earnings season. Azure continues to accelerate, while AI demand remains so strong that management openly acknowledged it still exceeds available capacity.
To me, this is one of the clearest indicators that enterprise AI adoption is still in its early stages. Another important point is commercial backlog, which provides exceptional visibility into future revenue growth. Despite investing over $90 billion in AI infrastructure (I think what market is expecting but not too much) during the fiscal year, Microsoft continues to generate enormous free cash flow and return more than $65 billion to shareholders through dividends and buybacks.
The dividend remains very well covered, leaving plenty of room for future increases. In my view, Microsoft is and will be a great comapny that you still can buy blind! nfa $MSFT (Microsoft)... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
Never bet against Microsoft! Love it !... Show More
1 reply
.
We use our own and third-party cookies on our websites to enhance your experience, analyze traffic, and for security and marketing. For more info, see our Cookie Policy or go to Manage Settings.
Privacy Preference Center
When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
More information
Manage Consent Preferences
Strictly Necessary Cookies
Always Active
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
