• by Laurie Sullivan , 7 hours ago

Microsoft reported Wednesday that revenue rose 18% to $90 billion in the quarter that ended in June, a sign its investments in data centers will continue and revenue from artificial intelligence (AI) will continue to accelerate.

Satya Nadella, Microsoft CEO, said revenue from its Azure cloud business surpassed $100 billion for the first time in fiscal year 2026, which ended in June.

Typically, the company does not break out revenue from its cloud business, but its growth rate for this sector in the quarter rose 43%, higher than in the previous quarter.

"Azure was central to the story," analysts at Emarketer wrote in a research note published Wednesday, adding that for the first time "Microsoft 365 Copilot crossed 30 million paid seats."

Microsoft Cloud revenue came in at $59.3 billion for the quarter, up 27% year-over-year (YoY), likely on the strength of AI dependencies, Emarketer wrote.

Copilot -- which includes AI features supported by cloud services embedded in its Office suite of applications -- grew 20 million paid users last quarter to 30 million, showing the time invested in convincing users to try it has paid off. 

Microsoft reported a 10% increase in search advertising revenue excluding traffic acquisition costs (ex-TAC) for the fiscal quarter. 

This 9% constant currency growth was supported by higher revenue per search across Bing and Edge, despite a slight decline from the 12% growth recorded in Q3 FY26.

Aside from Anthropic, Microsoft also holds a stake in OpenAI, pushing its net income to $35.8 billion for the quarter.

For the fiscal year, which ended June 30, Microsoft reported $331.8 billion in revenue with a net income of $133.7 billion for the year.