Microsoft's Q3 FY2026 Earnings Results:
Total revenue was $82.886 billion, representing an 18% year-over-year increase.
Diluted earnings per share were $4.27 (previous period: $3.46), reflecting a 23% growth under Generally Accepted Accounting Principles (GAAP) and a 21% increase on a non-GAAP basis (or 18% growth at constant currency).
Net profit was $31.778 billion, growing by 23% under GAAP and 20% on a non-GAAP basis (18% growth at constant currency).
Non-GAAP net profit was $31.792 billion, up 20% year-over-year, with Non-GAAP earnings per share of $4.27 (previous period: $3.54).
Revenue from Productivity and Business Processes amounted to $35.013 billion, marking a 17% year-over-year increase.
Intelligent Cloud revenue reached $34.681 billion, representing a 30% year-over-year growth.
More Personal Computing revenue was $13.192 billion, showing a 1% year-over-year decline.
Key Highlights
Microsoft Cloud revenue was $54.5 billion, increasing by 29% (25% growth at constant currency), while commercial remaining performance obligations grew by 99% to reach $627 billion.
Revenue from the Productivity and Business Processes segment was $35 billion, an increase of 17% (or 13% in constant currency), with key highlights as follows:
Microsoft 365 Commercial cloud revenue grew by 19% (or 15% in constant currency).
Microsoft 365 Consumer cloud revenue increased by 33% (or 29% in constant currency).
LinkedIn revenue rose by 12% (or 9% in constant currency).
Dynamics 365 revenue grew by 22% (or 17% in constant currency).
Intelligent Cloud segment revenue reached $34.7 billion, reflecting a year-over-year increase of 30% (or 28% in constant currency), with key highlights as follows:
Azure and other cloud services revenue surged by 40% (or 39% in constant currency).
Revenue from the More Personal Computing business amounted to $13.2 billion, representing a decline of 1% (or 3% in constant currency), with key highlights as follows:
Windows OEM and device revenue decreased by 2% (or 3% in constant currency).
Xbox content and services revenue fell by 5% (or 7% in constant currency).
Search advertising revenue, excluding traffic acquisition costs, grew by 12% (or 9% at constant currency rates).
Microsoft Chairman and Chief Executive Officer Satya Nadella stated:
"We are focused on delivering cloud and AI infrastructure and solutions that enable every organization to achieve optimal outcomes in the age of agent computing. Our AI business has an annualized run rate exceeding $37 billion, representing a year-over-year growth of 123%."
Microsoft Executive Vice President and Chief Financial Officer Amy Hood stated:
"We delivered results surpassing expectations in revenue, operating income, and earnings per share, reflecting strong execution and growing demand for Microsoft Cloud."
Share Repurchases:
In this fiscal year, Microsoft returned approximately $10.2 billion to shareholders through share repurchases and dividends.
Editor/Liam