MICROSOFT CORP (MSFT) Earnings History

MICROSOFT CORP - Q3 FY2026 EarningsBeat

Filed at: Apr 29, 2026, 4:03 PM EDT|Read from source

EXECUTIVE SUMMARY

Microsoft demonstrated strong performance driven by its cloud and AI initiatives, exceeding expectations across key financial metrics. The company's AI business shows significant growth, and demand for its cloud infrastructure remains robust, contributing to accelerated revenue and operating income.

POSITIVE HIGHLIGHTS

  • •

    Revenue increased 18% year-over-year to $82.9 billion, with constant currency growth at 15%.

    positive
  • •

    Operating income increased 20% year-over-year to $38.4 billion, with constant currency growth at 16%.

    positive
  • •

    Diluted earnings per share increased 23% year-over-year to $4.27 on a GAAP basis.

    positive
  • •

    Microsoft Cloud revenue grew 29% (25% in constant currency) to $54.5 billion.

    positive
  • •

    AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.

    positive
  • •

    Commercial remaining performance obligation increased 99% to $627 billion.

    positive

CONCERNS & RISKS

  • •

    More Personal Computing segment revenue decreased 1% (down 3% in constant currency) to $13.2 billion.

    attention
  • •

    Windows OEM and Devices revenue decreased 2% (down 3% in constant currency).

    attention
  • •

    Xbox content and services revenue decreased 5% (down 7% in constant currency).

    attention
  • •

    Non-GAAP net income was impacted by $14 million in net losses from investments in OpenAI for Q3 FY2026, compared to $583 million in net losses in Q3 FY2025.

    attention

FINANCIAL METRICS

Revenue
Quarterly
$82.89B
+18.3%
Prior year: $70.07B
Annual (YTD)
$241.83B
N/A
Prior year: $205.28B
Net Income
Quarterly
$31.78B
+23.1%
Prior year: $25.82B
Annual (YTD)
$97.98B
N/A
Prior year: $74.60B
EPS (Diluted)
Quarterly
N/A
N/A
Operating Income
Quarterly
$38.40B
+20.0%
Prior year: $32.00B
Annual (YTD)
$114.63B
N/A
Prior year: $94.20B
EPS (Basic)
Quarterly
$4.28
+23.3%
Prior year: $3.47

MARGIN ANALYSIS

Gross Margin
Current Quarter
67.6%
Prior Year
68.7%
YoY Change
-109 bps
Operating Margin
Current Quarter
46.3%
Prior Year
45.7%
YoY Change
+63 bps
Net Margin
Current Quarter
38.3%
Prior Year
36.9%
YoY Change
+148 bps

Margin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.

REVENUE BY SEGMENT — Q3 FY2026 2026

VISUAL OVERVIEW

|
Productivity and Business Processes(4 segments)
0.0%
N/A
CC: +13.0%
Intelligent Cloud(1 segment)
0.0%
N/A
CC: +28.0%
More Personal Computing(2 segments)
0.0%
N/A
CC: -3.0%

DETAILED BREAKDOWN

|
SegmentCurrentPrior YrYoY% TotalCC
Productivity and Business Processes
N/A———+13.0%
Intelligent Cloud
N/A———+28.0%
More Personal Computing
N/A———-3.0%
Total Revenue$0.00M——100.0%—

Segment performance shows business unit health and growth drivers. Constant currency (CC) removes FX impact for like-for-like comparison.

EARNINGS CALL —

Call date
2026-04-29
Tone
N/A
Hedge density
N/A
Deflection rate
N/A

SPECIAL ITEMS & ADJUSTMENTS

Q3 FY2026
Impact from investments in OpenAI
Non-GAAP adjustment
$14M
$0.00 per share
Q3 FY2025
Impact from investments in OpenAI
Non-GAAP adjustment
$583M
$0.08 per share
Total Impact
$597M$-0.08 per share

Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.

MANAGEMENT COMMENTARY

We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era.

— MICROSOFT CORP, Q3 FY2026 2026 Earnings Call

Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.

— MICROSOFT CORP, Q3 FY2026 2026 Earnings Call

We delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud.

— MICROSOFT CORP, Q3 FY2026 2026 Earnings Call

Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.

OPERATIONAL METRICS

Azure and other cloud services revenue
N/A
+40.0% YoY
percentage
Commercial remaining performance obligation
627000.0M
+99.0% YoY
dollars
Dynamics 365 revenue
N/A
+22.0% YoY
percentage
LinkedIn revenue
N/A
+12.0% YoY
percentage
Microsoft 365 Commercial cloud revenue
N/A
+19.0% YoY
percentage
Microsoft 365 Consumer cloud revenue
N/A
+33.0% YoY
percentage
Microsoft Cloud revenue
54500.0M
+29.0% YoY
dollars
Search advertising revenue excluding traffic acquisition costs
N/A
+12.0% YoY
percentage
Windows OEM and Devices revenue
N/A
-2.0% YoY
percentage
Xbox content and services revenue
N/A
-5.0% YoY
percentage

Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.

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