Microsoft (MSFT) Q3 earnings report 2026

Microsoft shares slipped 2% on Wednesday after the software maker reported more robust fiscal third-quarter results than analysts had expected.

Here’s how the company did in comparison with LSEG consensus:

• Earnings per share: $4.27 adjusted vs. $4.06 expected
• Revenue: $82.89 billion vs. $81.39 billion expected

Microsoft’s revenue grew 18% year over year in the quarter, which ended on March 31, according to a statement.

Net income of $31.78 billion, or $4.27 per share, was up from $25.82 billion, or $3.46 per share, in the same quarter a year earlier. Adjusted earnings exclude a $14 million decrease in net income from Microsoft’s OpenAI investments.

Microsoft reported $31.9 billion in quarterly capital expenditures and finance leases, up 49% and less than the $34.9 billion consensus among analysts polled by Visible Alpha.

Revenue from Microsoft’s Azure and other cloud services surged 40%. Analysts polled by StreetAccount and CNBC had expected 39.3% and 38.8%, respectively.

The full Intelligent Cloud segment containing Azure, server products and GitHub and Nuance cloud services posted $34.68 billion in revenue. The sum came in higher than the $34.27 billion consensus among analysts surveyed by StreetAccount.

Microsoft’s Productivity and Business Processes segment, which includes Office productivity software, LinkedIn and Dynamics business software, totaled $35.01 billion in revenue. The figure was up about 17% and above StreetAccount’s $34.43 billion consensus.

The company now has over 20 million seats for the 365 Copilot artificial intelligence add-on for commercial Office subscriptions. In January, the company disclosed 15 million seats.

Microsoft’s More Personal Computing unit, which includes the Windows operating system, Xbox, Surface devices and Bing search advertising, contributed $13.19 billion in revenue, down 1%. StreetAccount’s consensus was $12.73 billion.

Sales of Windows licenses to device makers and Microsoft’s own devices were down 2%. Technology industry researcher Gartner estimated that PC shipments increased by 4% during the quarter.

Annualized revenue from AI altogether now stands at $37 billion, up 123%.

Microsoft now has $627 billion in commercial remaining performance obligations, encompassing unearned revenue and amounts that will be recognized as revenue. The number was up by $2 billion from the prior quarter.

During the quarter, the most senior Office software leader, Rajesh Jha, announced plans to retire, as did gaming chief Phil Spencer.

As of Wednesday’s close, Microsoft stock was down 12% so far in 2026, following its worst quarterly performance since 2008. That’s due in part to broader market concern that AI will eat software, and fears specific to the company that its hefty AI investments won’t produce the desired results.

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