◆ Inside the Latest Quarter (Q4 FY2026)

Microsoft (MSFT) — the variant view

Azure +43% and past $100 billion, the backlog up 84% — and a quarterly construction bill of $35.8 billion, more than three times what was returned to shareholders.

📈 MSFT valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Microsoft's fourth fiscal quarter of 2026, to the end of June, closed a year in which the company grew eighteen percent and spent more on buildings and chips than it had in the whole of any year before 2025. Revenue was $90.0 billion, up eighteen percent; operating income $40.6 billion, also up eighteen; and net income $35.8 billion, up thirty-one on a GAAP basis and twenty-two once the OpenAI investment is stripped out1. Diluted earnings per share were $4.81, or $4.74 adjusted.

The June 2026 quarter, against the same quarter a year earlier ($B)$90.0BRevenue$76.4BRevenue, Q4 FY2025$40.6BOperating income$34.3BOperating income,Q4 FY2025$35.8BCapital spendingQ4 FY2026 earnings release and the FY2026 10-K; Azure grew 43% in the quarter
Eighteen per cent more revenue, eighteen per cent more operating profit — and a capital bill of $35.8B in the quarter, more than twice the year-earlier figure.

The cloud did the work. Azure grew forty-three percent in the quarter, its fastest rate of the year, and Satya Nadella used the release to note that Azure had passed $100 billion of annual revenue for the first time and that Microsoft 365 Copilot had reached more than thirty million paid seats2. Microsoft Cloud revenue reached $59.3 billion, up twenty-seven percent, and the commercial backlog rose eighty-four percent to $678 billion3.

Underneath the headline the three segments went three different ways. Intelligent Cloud grew thirty-two percent to $39.3 billion. Productivity and Business Processes grew fourteen percent to $37.8 billion. More Personal Computing fell four percent to $12.9 billion, with Windows OEM and Devices down seven and XBOX content and services down ten4. The consumer half of Microsoft is now shrinking while the enterprise half compounds, and the quarter made no attempt to disguise it: operating expenses included severance and impairment charges in the XBOX business, alongside the costs of a Voluntary Retirement Program.

Two items in the quarter were not operating results at all. A $3.2 billion gain on Microsoft's investment in Anthropic, together with lower-than-expected retirement-programme costs, contributed about twenty-seven cents of the earnings per share relative to the guidance given in April5. Strip those out and Microsoft still beat its own forecasts on revenue, operating income and earnings — but an owner should notice that a company of this size now has quarters in which a mark on a private stake is worth a tenth of the profit.

Then there is the bill. Capital spending was $35.8 billion in the quarter alone, more than twice the figure of a year earlier and more than the whole of fiscal 20236. Microsoft returned $10.2 billion to shareholders in the same three months — less than a third of what it put into concrete and silicon.

So does the quarter change the moat? No, but it clarifies its shape. The backlog is real, the customers are the world's largest enterprises, and the switching costs binding them to Windows, Office and Azure are as deep as any in business. What has changed is that the franchise now consumes capital at a rate that would have been unthinkable for a software company, and the returns on it are still to be proved. A fortress customers are lining up to pay for years in advance is a fortress being reinforced. It is also, for the first time, a fortress with a construction budget larger than most companies' revenue.

References
  1. ReportedRevenue $90,007M (+18%); operating income $40,603M (+18%); net income $35,766M GAAP (+31%) and $35,286M non-GAAP (+22%); diluted EPS $4.81 and $4.74.
    Microsoft, Q4 FY2026 earnings release (Form 8-K, Exhibit 99.1) — quarter ended June 30, 2026: revenue $90,007M (+18%); operating income $40,603M (+18%); net income $35,766M GAAP and $35,286M non-GAAP; diluted EPS $4.81 and $4.74; Microsoft Cloud revenue $59.3B (+27%); commercial remaining performance obligation +84% to $678B; Azure and other cloud services +43%; Productivity and Business Processes $37,847M (+14%); Intelligent Cloud $39,306M (+32%); More Personal Computing $12,854M (-4%); Windows OEM and Devices -7%; XBOX content and services -10%; a $3.2B gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses contributing $0.27 of EPS against guidance; Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot reached over 30 million paid seats; $10.2B returned to shareholders — Q4 FY2026 (quarter ended June 30, 2026) · publ. July 29, 2026 · source ↗
  2. ReportedAzure and other cloud services revenue grew 43%; Azure surpassed $100 billion of annual revenue for the first time and Microsoft 365 Copilot reached over 30 million paid seats.
    Microsoft, Q4 FY2026 earnings release (Form 8-K, Exhibit 99.1) — quarter ended June 30, 2026: revenue $90,007M (+18%); operating income $40,603M (+18%); net income $35,766M GAAP and $35,286M non-GAAP; diluted EPS $4.81 and $4.74; Microsoft Cloud revenue $59.3B (+27%); commercial remaining performance obligation +84% to $678B; Azure and other cloud services +43%; Productivity and Business Processes $37,847M (+14%); Intelligent Cloud $39,306M (+32%); More Personal Computing $12,854M (-4%); Windows OEM and Devices -7%; XBOX content and services -10%; a $3.2B gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses contributing $0.27 of EPS against guidance; Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot reached over 30 million paid seats; $10.2B returned to shareholders — Q4 FY2026 (quarter ended June 30, 2026) · publ. July 29, 2026 · source ↗
  3. ReportedMicrosoft Cloud revenue $59.3 billion (+27%); commercial remaining performance obligation +84% to $678 billion.
    Microsoft, Q4 FY2026 earnings release (Form 8-K, Exhibit 99.1) — quarter ended June 30, 2026: revenue $90,007M (+18%); operating income $40,603M (+18%); net income $35,766M GAAP and $35,286M non-GAAP; diluted EPS $4.81 and $4.74; Microsoft Cloud revenue $59.3B (+27%); commercial remaining performance obligation +84% to $678B; Azure and other cloud services +43%; Productivity and Business Processes $37,847M (+14%); Intelligent Cloud $39,306M (+32%); More Personal Computing $12,854M (-4%); Windows OEM and Devices -7%; XBOX content and services -10%; a $3.2B gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses contributing $0.27 of EPS against guidance; Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot reached over 30 million paid seats; $10.2B returned to shareholders — Q4 FY2026 (quarter ended June 30, 2026) · publ. July 29, 2026 · source ↗
  4. ReportedIntelligent Cloud $39,306M (+32%); Productivity and Business Processes $37,847M (+14%); More Personal Computing $12,854M (-4%), with Windows OEM and Devices -7% and XBOX content and services -10%.
    Microsoft, Q4 FY2026 earnings release (Form 8-K, Exhibit 99.1) — quarter ended June 30, 2026: revenue $90,007M (+18%); operating income $40,603M (+18%); net income $35,766M GAAP and $35,286M non-GAAP; diluted EPS $4.81 and $4.74; Microsoft Cloud revenue $59.3B (+27%); commercial remaining performance obligation +84% to $678B; Azure and other cloud services +43%; Productivity and Business Processes $37,847M (+14%); Intelligent Cloud $39,306M (+32%); More Personal Computing $12,854M (-4%); Windows OEM and Devices -7%; XBOX content and services -10%; a $3.2B gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses contributing $0.27 of EPS against guidance; Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot reached over 30 million paid seats; $10.2B returned to shareholders — Q4 FY2026 (quarter ended June 30, 2026) · publ. July 29, 2026 · source ↗
  5. ReportedA $3.2 billion gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses, partially offset by severance and impairment charges in XBOX, contributed $0.27 of diluted EPS against the April guidance.
    Microsoft, Q4 FY2026 earnings release (Form 8-K, Exhibit 99.1) — quarter ended June 30, 2026: revenue $90,007M (+18%); operating income $40,603M (+18%); net income $35,766M GAAP and $35,286M non-GAAP; diluted EPS $4.81 and $4.74; Microsoft Cloud revenue $59.3B (+27%); commercial remaining performance obligation +84% to $678B; Azure and other cloud services +43%; Productivity and Business Processes $37,847M (+14%); Intelligent Cloud $39,306M (+32%); More Personal Computing $12,854M (-4%); Windows OEM and Devices -7%; XBOX content and services -10%; a $3.2B gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses contributing $0.27 of EPS against guidance; Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot reached over 30 million paid seats; $10.2B returned to shareholders — Q4 FY2026 (quarter ended June 30, 2026) · publ. July 29, 2026 · source ↗
  6. ReportedAdditions to property and equipment were $115,948M for fiscal 2026 against $80,146M through nine months, implying $35.8B in the June quarter; $10.2 billion was returned to shareholders in the quarter.
    Microsoft Form 10-K, FY2026 — financial statements and notes: net income $133,749M, diluted EPS $17.95; segment revenue and operating income (Productivity and Business Processes $139,996M / $83,879M; Intelligent Cloud $137,791M / $56,972M; More Personal Computing $54,052M / $14,386M); revenue by product and service offering; additions to property and equipment $115,948M; net cash from operations $182,935M; unearned revenue $75,712M with $194,184M deferred and $185,737M recognised; revenue allocated to remaining performance obligations $684B, commercial $678B at a weighted average duration of about 2.3 years with approximately 30% expected within twelve months; contractual obligations $743,821M — FY2026 (ended June 30, 2026) · publ. July 29, 2026 · source ↗
Sources
Generated September 22, 2026