- Microsoft Cloud Revenue Surpasses $168 Billion - Grew 23% year-over-year, driven by strong performance across cloud products.
- Azure Revenue Exceeds $75 Billion - Increased 34% year-over-year, with growth across all workloads.
- Microsoft Fabric Revenue Grows 55% - Reached over 25,000 customers, demonstrating strong adoption.
- Copilot Apps Surpass 100 Million MAU - Showcases rapid user growth and AI-driven product success.
- Commercial Bookings Exceed $100 Billion - Up 37% year-over-year, indicating robust demand for Microsoft's enterprise solutions.
Segment Performance
The Intelligent Cloud segment revenue was $29.9 billion, growing 26%, driven by Azure and on-premises server business, with Azure revenue growing 39%, significantly ahead of expectations. The More Personal Computing segment revenue was $13.5 billion, growing 9%, driven by Windows OEM and Xbox content and services. As Satya Nadella noted, "Three things drive Azure's growth: migrations, cloud-native applications scaling, and new AI workloads," highlighting the company's strong position in the cloud market.
Cloud and AI Growth Drivers
Microsoft's cloud growth is driven by a combination of migrations, cloud-native applications, and new AI workloads. The company's Copilot apps surpassed 100 million monthly active users, and Microsoft Fabric revenue increased 55% year-over-year. Azure revenue is expected to grow approximately 37% in constant currency in Q1, driven by continued demand for cloud and AI services.
Valuation and Outlook
Microsoft's valuation metrics, including a P/E Ratio of 38.26 and EV/EBITDA of 31.51, indicate a premium valuation. However, the company's strong growth prospects, driven by its cloud and AI businesses, justify this valuation. For FY '26, Microsoft expects double-digit revenue and operating income growth, with capital expenditure growth moderating compared to FY '25. With a strong track record of delivering on growth expectations, Microsoft is well-positioned to continue its success in the cloud and AI markets.