Microsoft CFO's email to staff has a message on the company's biggest AI bets
Microsoft earnings beat expectations Read Microsoft CFO Amy Hood's email to employees here "Team, Thank you all for a strong finish to our fiscal year
Microsoft earnings beat expectations Read Microsoft CFO Amy Hood's email to employees here "Team, Thank you all for a strong finish to our fiscal year. Our Q4 results exceeded the outlook for revenue and operating income that we shared with Wall Street and we showed important progress in key areas like Azure and M365 Copilot. You can see our earnings announcement here. Microsoft Cloud revenue was $59.3 billion in Q4 and $214 billion for the full fiscal year, growing 27% across both time periods. Commercial bookings grew 18%, excluding OpenAI, driven by strength across our core annuity business. Commercial remaining performance obligation, which is a measure of the business we already have under contract, increased to $678 billion, up over $50 billion sequentially. Thank you for staying focused on security, quality, and reliability. The trust customers place in us to power their most important workloads is earned every day through the work you do. A few other key points from the quarter * We generated $19.6 billion in free cash flow, highlighting the strength of our business and the flexibility it creates.
* We invested over $41 billion in capex to support the demand we continue to see. A big thank you to our infrastructure teams for bringing new capacity online and to our engineering teams for creating efficiencies that enable us to do more with every gigawatt we deploy. * Azure and other cloud services revenue growth accelerated to 43%. And for FY26, Azure surpassed $100 billion in revenue, up 41%. * Microsoft 365 commercial cloud revenue increased 16% on an adjusted basis, ahead of expectations. Building on the Copilot momentum we saw in Q3, net paid seat adds more than doubled sequentially and are now over 30 million. * Microsoft 365 consumer cloud revenue increased 24% with subscriber growth of 7%. * Search revenue e TAC increased 10%, and Bing and Edge both took share again this year. * Windows OEM and Devices revenue decreased 7%, which is higher than overall PC market demand, as our OEM and channel partners continued to build inventory in response to higher component prices.
* XBOX content and services revenue decreased 10%, against a prior-year quarter that benefited from strong first-party content. During the quarter, Forza Horizon 6 saw strong player reception, reaching a record 6 million players in its first two days. * And, LinkedIn revenue increased 12% primarily driven by Marketing Solutions. Before we turn the final page on FY26, I want to recognize what we accomplished together. It was a year of meaningful progress as we expanded capacity, improved our product quality, evolved business models, and changed how we operate thru new rhythms like cohorts and missions. We built momentum throughout the year and delivered our strongest execution and operating performance in the final quarter of the year. Most importantly, we remained grounded that our own success at Microsoft will not come unless we continue to create meaningful value for our customers and help them accelerate their own growth. Thank you to teams across the company for the focus, discipline, and commitment you brought every day.
The BriefWire