Microsoft reported a 43% year-over-year growth for Azure and other cloud services in the fiscal fourth quarter ending June 30, 2026. Annual revenue for Azure surpassed $100 billion for the first time, marking a 41% increase compared to the previous year. Total company revenue for the quarter reached $90 billion, an 18% rise.
Capital expenditures for the quarter totaled approximately $41 billion, while full-year investments in property and equipment reached $115.9 billion, an 80% increase. The company expanded its infrastructure by adding 31 data centers in the fourth quarter and 88 throughout the fiscal year.
The gross margin for Microsoft Cloud declined to 65% from 68% in the previous quarter due to significant investments in AI infrastructure. Commercial remaining performance obligations grew by 84% year-over-year to $678 billion. Additionally, Microsoft 365 Copilot reached 30 million paid seats.
The company anticipates Azure growth of 45% in constant currency for the first quarter of fiscal 2027. Management noted that previous capacity constraints are easing as new infrastructure becomes operational, with the partnership with OpenAI continuing to support AI workload demand.
