Microsoft boosts revenue and profit with cloud and AI, but Windows and Xbox sector loses momentum By Jeronimo Santos
3 min read
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Microsoft revealed its fiscal results for the last quarter on July 29, 2026. As anticipated by the market, the data is mostly positive, although it highlights an imbalance between the company’s different divisions.
The company’s revenue reached US$90 billion, an increase of 18% compared to the previous year. Operating profit also grew 18%, reaching US$40.6 billion, resulting in diluted earnings per share of US$4.81, representing an increase of 31%.
As this period closes out the company’s 2026 fiscal year, Microsoft also confirmed an overall increase of 18% in revenue and 21% in operating profit for the full year.
According to information from Microsoft itself, the good results are due not only to direct profits, but also to specific factors, such as the investment in Anthropic, the company responsible for Claude, and lower than expected expenses in areas such as severance pay.
Main divisions that showed growth at Microsoft
- Microsoft Cloud stood out as the main driver of results, generating US$59.3 billion in revenue, a 27% growth compared to the previous year.
- Intelligent Cloud, which encompasses the company’s artificial intelligence (AI) products and services such as Azure, saw the largest annual increase with 32% in revenue, contributing $39.3 billion of the total.
- Among successes in these areas, Azure revenue surpassed the $100 billion mark for the first time, and Microsoft 365 Copilot reached 30 million paid subscribers.
- In the Productivity and Business sector, which saw revenue rise 14%, the news is equally positive: Microsoft 365 increased revenue in both commercial and consumer versions, and LinkedIn grew 12% after redesigns.
- Search advertising revenue also increased 10%, excluding traffic acquisition costs.
These numbers highlight the company’s current strategy focused on artificial intelligence, with an increasing focus on developing its own technology and less dependence on OpenAI projects.
Revenue drop for Windows and Xbox
The More Personal Computing division presented the least encouraging results for the company, even though this did not compromise the growth driven by the cloud and AI areas.
Revenue from the family of devices and the Windows system decreased by 7%, but surpassed the most pessimistic market forecasts. Additionally, the Xbox Contents and Services subcategory recorded a 10% decline.
For the computer and other electronics segment, it is speculated that the global memory chip crisis has contributed to the negative impact, increasing production costs and consumer prices. Additionally, some projects in the area were not as successful as expected, leading to a review of strategy and the reduction of Copilot’s functionality on Windows 11 after receiving criticism.
The situation regarding the division of games, in turn, appears to be more complex. The new CEO, Asha Sharma, is leading a vast restructuring of the Xbox brand, which includes layoffs, the sale of studios and several strategic changes.
