• by Laurie Sullivan , 4 hours ago

Microsoft reported its second-quarter 2026 earnings Wednesday, with overall revenue rising 17% to $81.3 billion for the quarter.

The growth was primarily driven by its cloud services and artificial intelligence (AI) products, while search and news advertising revenue growth slowed. Search and news advertising revenue, excluding traffic acquisition costs, rose 10%.

LinkedIn made some surprising gains in video ads.

“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," stated Satya Nadella, chairman and chief executive officer of Microsoft. “We are pushing the frontier across our entire AI stack to drive new value for our customers and partners.”

Windows, Edge, and Bing gained share, Nadella said during the earnings call.

Growth at LinkedIn -- known for its recruiting tools and job postings -- was fueled by its ad business LinkedIn Marketing Solutions. LinkedIn revenue rose 11% compared with the prior quarter.

During the earnings call with analysts and investors, Microsoft said paid video ads on LinkedIn grew 30% year-over-year.

That increase came as the platform pushes into short-form video, a format made popular by YouTube and TikTok. LinkedIn adopted it for career advice, industry topics, and company announcements.

Microsoft also noted it has seen the biggest quarter-over-quarter improvement in response quality with Copilot, driving record use with the average number of conversations per user doubling year-over-year.

The company reported that daily active users increased 10x year-over-year, with strong momentum from Researcher Agent -- which supports both OpenAI and Claude -- as well as Agent Mode in Excel, PowerPoint, and Word. The company added over 160% more software licenses year-over-year.

All in all, the company reported, a record quarter for Microsoft Corporation 365 Copilot with new licenses for the software rising more than 160% year-over-year.