Microsoft NASDAQ:MSFT shares jumped about 7% on Thursday morning after the software company reported fiscal fourth-quarter results that topped Wall Street estimates and forecast continued strength in its cloud business.
Microsoft posted adjusted earnings of $4.74 per share on revenue of $90.01 billion for the quarter ended June 30, exceeding analysts' expectations of $4.24 per share and $87.62 billion in revenue. Quarterly revenue rose 18% from a year earlier, while net income increased to $35.77 billion from $27.23 billion.
Microsoft's Intelligent Cloud segment generated $39.31 billion in revenue, up 31.6% year over year, as Azure revenue growth accelerated to 43%. The company said Azure revenue exceeded $100 billion for fiscal 2026, while commercial remaining performance obligations rose 8% sequentially to $678 billion. Microsoft also projected first-quarter revenue of $89.85 billion to $90.95 billion, ahead of analysts' estimates.
Microsoft maintained its fiscal 2026 capital spending outlook at about $175 billion despite continued investment in artificial intelligence infrastructure. Quarterly capital expenditures and finance leases rose 69% to $41 billion, while free cash flow declined 23% to $19.64 billion. The company said it expects to remain free cash flow positive in fiscal 2027 as demand for Azure and AI services continues to grow.