Microsoft delivered strong second-quarter results driven by robust performance in its Intelligent Cloud and Productivity and Business Processes segments, with AI continuing to be a significant growth driver. The company exceeded expectations across key financial metrics, demonstrating broad-based strength and continued demand for its cloud offerings.
Microsoft Cloud revenue crossed $50 billion, increasing 26% (24% in constant currency) year-over-year.
positiveAzure and other cloud services revenue increased 39% (38% in constant currency).
positiveGAAP diluted EPS increased 60% year-over-year to $5.16.
positiveCommercial remaining performance obligation increased 110% to $625 billion.
positiveMicrosoft returned $12.7 billion to shareholders in Q2 FY2026, an increase of 32% compared to Q2 FY2025.
positiveMore Personal Computing segment revenue decreased 3% year-over-year (down 3% in constant currency).
attentionWindows OEM and Devices revenue was relatively unchanged year-over-year.
attentionXbox content and services revenue decreased 5% (down 6% in constant currency).
attentionNon-GAAP net income was impacted by a $7.6 billion net gain from investments in OpenAI, which boosted results.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total | CC |
|---|---|---|---|---|---|
Productivity and Business Processes | N/A | — | — | — | +14.0% |
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.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises.
We are pushing the frontier across our entire AI stack to drive new value for our customers and partners.
Microsoft Cloud revenue crossed $50 billion this quarter, reflecting the strong demand for our portfolio of services.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.