Microsoft is a global technology company known for its innovations in software, hardware, cloud computing, and artificial intelligence. The company, founded by Bill Gates and Paul Allen in 1975, transformed personal computing with Windows and Office.
Microsoft now offers a wide range of products, including Azure cloud services, Surface devices, and Microsoft 365, serving billions of customers. Its mission is to empower individuals and organizations while focusing on sustainability, inclusivity, and addressing global challenges through technology.
Microsoft’s commitment to sustainability and corporate social responsibility is evident in its goals, such as achieving carbon negativity by 2030.
Microsoft Fiscal Q1 2026
Microsoft (MSFT) reported strong financial results to start its fiscal year. Revenue reached $77.7 billion, up 18%, and operating income rose 24% to $38 billion.
Net income was $27.7 billion on a GAAP basis and $30.8 billion on a non-GAAP basis, showing increases of 12% and 22% respectively. Diluted earnings per share were $3.72 (GAAP) and $4.13 (non-GAAP), up 13% and 23%. The non-GAAP figures exclude the impact of investments in OpenAI.
Highlights:
- Microsoft Cloud revenue reached $49.1 billion, up 26%, with commercial remaining performance obligation rising 51% to $392 billion
- Productivity and Business Processes revenue was $33.0 billion, up 17%
- Microsoft 365 Commercial cloud revenue grew 17%; Consumer cloud revenue rose 26%
- LinkedIn revenue increased 10%; Dynamics 365 revenue rose 18%
- Intelligent Cloud revenue hit $30.9 billion, up 28%; Azure and other cloud services grew 40%
- More Personal Computing revenue was $13.8 billion, up 4%; Windows OEM and Devices rose 6%
- Xbox content and services revenue increased 1%; Search and news advertising revenue rose 16%
- Microsoft returned $10.7 billion to shareholders through dividends and share repurchases
Boards Statements
Satya Nadella, chairman and chief executive officer of Microsoft, emphasized that the company’s global cloud and AI infrastructure, along with its Copilot tools across key industries, is driving widespread adoption and tangible impact.
He noted that this momentum is fueling increased investment in AI, both in capital and talent, to seize the vast opportunities ahead.
Amy Hood, executive vice president and chief financial officer, added that Microsoft began the fiscal year with strong performance, surpassing expectations in revenue, operating income, and earnings per share. She highlighted the ongoing strength of Microsoft Cloud, driven by rising customer demand for its unique platform.
Impact on the Stock Market
Microsoft’s stock dipped 2% in pre-market trading after its Q3 earnings, despite strong results. This is largely due to investor concerns over soaring AI infrastructure costs. The company spent nearly $35 billion in the September quarter, up 74% year-over-year, with about half going toward short-term assets like Nvidia chips to ease cloud capacity bottlenecks. This spending exceeded expectations and raised questions about long-term profitability.
While Azure cloud revenue grew 40%, beating forecasts, Microsoft warned it would remain capacity-constrained on AI through the end of the fiscal year.
The company projected Q2 revenue between $79.5 billion and $80.6 billion, slightly above estimates. Still, the combination of aggressive AI investment, cautious guidance, and fears of a potential industry bubble contributed to the market’s muted reaction.
