AI Earnings Predictions for Microsoft Corporation (MSFT)

EX-99.1

2 msft-ex99_1.htm

EX-99.1

EX-99.1

Exhibit 99.1

Microsoft Cloud and AI Strength Fuels Fourth Quarter Results

REDMOND, Wash. — July 29, 2026 — Microsoft Corp. today announced the following results for the quarter ended June 30, 2026, as compared to the corresponding period of last fiscal year:

• Revenue was $90.0 billion and increased 18% (up 17% in constant currency)

• Operating income was $40.6 billion and increased 18%

• Net income was $35.8 billion and increased 31% on a GAAP basis, and was $35.3 billion and increased 22% on a non-GAAP basis

• Diluted earnings per share was $4.81 and increased 32% on a GAAP basis, and was $4.74 and increased 23% on a non-GAAP basis

• Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below

Several discrete items impacted our financial results in the quarter when compared to our forward-looking guidance provided on April 29, 2026, resulting in a benefit of $0.27 on diluted earnings per share. These include a $3.2 billion gain from our investment in Anthropic and lower-than-expected expenses related to the Voluntary Retirement Program which were partially offset by severance expense and impairment charges in XBOX. When adjusting for these items, we exceeded expectations across revenue, operating income, and diluted earnings per share.

“We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results,” said Satya Nadella, chairman and chief executive officer of Microsoft. “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.”

“We delivered a strong quarter to close out the fiscal year, highlighted by Microsoft Cloud revenue of $59.3 billion, up 27% year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

The following table adjusts for the impact from investments in OpenAI and reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

Three Months Ended June 30,

2026

2025

Percentage Change Y/Y

Percentage Change Y/Y

($ in millions, except per share amounts)

As Reported (GAAP)

Impact from OpenAI*

As Adjusted (non-GAAP)

As Reported (GAAP)

Impact from OpenAI*

As Adjusted (non-GAAP)

GAAP

Constant Currency

Net Impact from OpenAI*

Non-GAAP

Non-GAAP Constant Currency

Net Income

$35,766

$(480)

$35,286

$27,233

$1,575

$28,808

31%

31%

$(2,055)

22%

22%

Diluted Earnings per Share

$4.81

$(0.07)

$4.74

$3.65

$0.21

$3.86

32%

32%

$(0.28)

23%

23%

*Impact from OpenAI adjusts for the impact from investments in OpenAI

Business Highlights

Microsoft Cloud revenue was $59.3 billion and increased 27%, and commercial remaining performance obligation increased 84% to $678 billion.

Revenue in Productivity and Business Processes was $37.8 billion and increased 14%, with the following business highlights:

• Microsoft 365 Commercial cloud revenue increased 16% when adjusted for the prior year comparable that benefited from 2 points of in-period revenue recognition. On a reported basis, Microsoft 365 Commercial cloud revenue increased 14%.

• Microsoft 365 Consumer cloud revenue increased 24% (up 22% in constant currency)

• LinkedIn revenue increased 12% (up 10% in constant currency)

• Dynamics 365 revenue increased 13% (up 12% in constant currency)

Revenue in Intelligent Cloud was $39.3 billion and increased 32% (up 31% in constant currency), with the following business highlights:

• Azure and other cloud services revenue increased 43%

Revenue in More Personal Computing was $12.9 billion and decreased 4% (down 5% in constant currency), with the following business highlights:

• Windows OEM and Devices revenue decreased 7%

• XBOX content and services revenue decreased 10%

• Search advertising revenue excluding traffic acquisition costs increased 10% (up 9% in constant currency)

Microsoft returned $10.2 billion to shareholders in the form of dividends and share repurchases in the fourth quarter of fiscal year 2026.

Fiscal Year 2026 Results

Microsoft Corp. today announced the following results for the fiscal year ended June 30, 2026, as compared to the corresponding period of last fiscal year:

• Revenue was $331.8 billion and increased 18% (up 16% in constant currency)

• Operating income was $155.2 billion and increased 21% (up 19% in constant currency)

• Net income was $133.7 billion and increased 31% on a GAAP basis, and increased 22% (up 20% in constant currency) on a non-GAAP basis

• Diluted earnings per share was $17.95 and increased 32% on a GAAP basis, and increased 22% (u

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8-K

false00007890190000789019us-gaap:CommonStockMember2026-01-282026-01-280000789019msft:NotesThreePointOneTwoFivePercentDueDecemberSixTwentyTwentyEightMember2026-01-282026-01-2800007890192026-01-282026-01-280000789019msft:NotesTwoPointSixTwoFivePercentDueMayTwoTwentyThirtyThreeMember2026-01-282026-01-28

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) January 28, 2026

Microsoft Corporation

Washington

001-37845

91-1144442

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

One Microsoft Way, Redmond, Washington 98052-6399

(425) 882-8080 www.microsoft.com/investor Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):



Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common stock, $0.00000625 par value per share

MSFT

Nasdaq

3.125% Notes due 2028

MSFT

Nasdaq

2.625% Notes due 2033

MSFT

Nasdaq

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02.

Results of Operations and Financial Condition

On January 28, 2026, Microsoft Corporation issued a press release announcing its financial results for the fiscal quarter ended December 31, 2025. A copy of the press release is furnished as Exhibit 99.1 to this report. In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.

Financial Statements and Exhibits

(d) Exhibits:

99.1

Press release, dated January 28, 2026, issued by Microsoft Corporation

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MICROSOFT CORPORATION

Date: January 28, 2026

/s/ ALICE L. JOLLA

Alice L. Jolla

Corporate Vice President and Chief Accounting Officer