Highlights from the previous quarter
Microsoft came into this quarter riding strong momentum from the third quarter (Q3), where it once again beat at both the top and bottom lines.
- Revenue came in at $82.9 billion, up 18% year-on-year (YoY), beating expectations of $81.39 billion
- Adjusted earnings per share (EPS) hit $4.27, ahead of the $4.06 consensus.
But the real highlight was the continued surge in artificial intelligence (AI) and cloud:
- Microsoft Cloud revenue reached $54.5 billion (+29% YoY)
- Azure and other cloud services grew 40% (constant currency)
- Copilot paid seats surpassed 20 million, up more than 250% YoY.
Satya Nadella, Microsoft’s Chairman and chief executive officer (CEO), said ‘Our results this quarter reflect the growing demand for cloud and AI solutions, and our ability to deliver value to our customers.’
Despite the strong numbers, Microsoft’s share price finished 3.93% lower at $407.78 the following session. Investors appeared to focus more on Microsoft’s eye-watering ~$190 billion capital expenditure (capex) guidance for calendar 2026, well above expectations – driven in part by soaring memory and component costs