Azure crosses $100 billion in annual revenue as Microsoft posts record Q4

Microsoft reported fourth-quarter fiscal 2026 results on July 29, posting total revenue of $90.0 billion — up 18% year-over-year — as its cloud and AI business continued its steep growth trajectory. The standout figure: Azure and other cloud services revenue grew 43% in the quarter, pushing Azure's full-year revenue past $100 billion for the first time in the company's history.

A landmark quarter for cloud and AI

The $100 billion Azure milestone is significant not just as a round number but as a marker of how completely Microsoft has reoriented its business around cloud infrastructure and AI. A decade ago, Azure barely existed as a line item. Now it sits alongside Office and Windows as one of Microsoft's foundational revenue pillars, and it's growing faster than either.

Microsoft Cloud revenue — the broader category that includes Azure, Microsoft 365 commercial cloud, and Dynamics 365 — reached $59.3 billion for the quarter, up 27% year-over-year. Commercial remaining performance obligation, a forward revenue indicator, jumped 84% to $678 billion, signaling that enterprise customers are locking in multi-year AI and cloud commitments at an accelerating pace.

Copilot hits 30 million paid seats

Microsoft 365 Copilot, the company's AI assistant for enterprise productivity, now has over 30 million paid seats. That's a meaningful adoption milestone: it puts Copilot well past the "pilot project" phase and into the category of enterprise-standard tools that organizations are budgeting for at scale. Microsoft 365 Commercial cloud revenue grew 16% in the quarter.

CEO Satya Nadella framed both milestones together: "This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation."

Earnings and the Anthropic factor

Net income for the quarter was $35.8 billion on a GAAP basis, up 31% year-over-year. Diluted earnings per share came in at $4.81, up 32%. The GAAP figures include a $3.2 billion gain from Microsoft's investment in Anthropic — the AI safety company that competes directly with OpenAI, in which Microsoft is also a major investor. Strip out the OpenAI investment impact, and non-GAAP EPS was $4.74, up 23%.

Operating income reached $40.6 billion, also up 18%. CFO Amy Hood called it "a strong quarter to close out the fiscal year."

What the numbers mean for the AI race

Azure's 43% growth rate outpaces Google Cloud's recent results and puts increasing distance between Microsoft and the rest of the hyperscaler field on AI workload capture. The 84% jump in commercial remaining performance obligations suggests the AI infrastructure spending cycle is far from peaking — enterprises are signing longer, larger contracts with Microsoft than at any point in the company's history.

The quarter underscores a broader pattern: the companies that bet heavily on AI infrastructure early are now collecting outsized returns, while those still debating AI strategy are watching the gap widen. Microsoft's results were reported by the company's official investor relations press release.