Slide 1: Fourth Quarter Fiscal Year 2026 Results
BS Microsoft Fourth Quarter Fiscal Year 2026 Results July 29, 2026 Satya Nadella Amy Hood Jonathan Neilson
Slide 2: Forward-looking statements
This presentation contains forward-looking statements, which are any predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of fa
Slide 3: Agenda
Agenda Financial Summary and Highlights Business Highlights Segment Overview and Highlights Appendix All. growth comparisons in this presentation relate to the corresponding period of last fiscal year unless otherwise noted. Numbers may not foot due to rounding. HE Microsoft 3
Slide 4: Financial Summary
FY26 Q4 Financial Summary GAAP and CC results (6 in billions, except per share amounts) FY26 Q4 Growth CC Growth* Productivity and Business Processes $37.8 14% 14% Intelligent Cloud $39.3 32% 31% More Personal Computing $12.9 (4)% (5)% Revenue $90.0 18% 17% Cost of revenue $29.5 23% 22% Gross margin
Slide 5: Impact to Financial Results
FY26 Q4 Impact to Financial Results Impact from Investments in OpenAl The following table adjusts for the impact from investments in OpenAl and reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results FY26 Q4 FY25 Q4 G
Slide 6: Financial Highlights
FY26 Q4 Financial Highlights Cash Returned to Shareholders + Returned $10.2 billion to shareholders with $6.8 billion in dividends and $3.4 billion in share repurchases Capital Expenditures + Capital expenditures, including assets acquired under finance leases, increased 70% to $41.0 billion to supp
Slide 7: Business Highlights
FY26 Q4 Business Highlights Commercial Business + Commercial bookings grew 18%, driven by strong execution in our core annuity sales motions, when excluding the impact from OpenAl. Commercial bookings increased 10% (up 11% CC) when including Azure commitments from OpenAl. + Commercial remaining perf
Slide 8: Segment Overview: Productivity and Business Processes
FY26 Q4 Segment Overview: Productivity and Business Processes Results + Revenue grew 14% driven by Microsoft 365 Commercial cloud + Cost of revenue grew 16% driven by investments in Al infrastructure to support M365 Copilot seat and usage growth + Gross margin dollars grew 14% (up 13% CC) and gross
Slide 9: Segment Highlights: Productivity and Business Processes
FY26 Q4 Segment Highlights: Productivity and Business Processes Microsoft 365 Commercial + Microsoft 365 Commercial cloud revenue grew 16% on an adjusted basis, normalized for the prior year comparable that benefited from 2 points of in-period revenue recognition, and grew 14% on a reported basis. R
Slide 10: Segment Overview: Intelligent Cloud
FY26 Q4 Segment Overview: Intelligent Cloud Results + Revenue grew 32% (up 31% CC) driven by Azure + Cost of revenue grew 42% driven by investments in Al infrastructure to support growing customer demand and increased GitHub Copilot usage + Gross margin dollars grew 24% and gross margin percentage d
Slide 11: Segment Highlights: Intelligent Cloud
FY26 Q4 Segment Highlights: Intelligent Cloud Server Products and Cloud Services + Azure and other cloud services revenue grew 43% driven by strong demand for services across the platform with continued growth across all workloads + Server products revenue was relatively unchanged (down 1% CC) drive
Slide 12: Segment Overview: More Personal Computing
FY26 Q4 Segment Overview: More Personal Computing Results + Revenue declined 4% (down 5% CC) driven by XBOX and Windows OEM and Devices, partially offset by growth in Search advertising + Cost of revenue declined 8% driven by lower amortization of acquired intangible assets from the Activision acqui
Slide 13: Segment Highlights: More Personal Computing
FY26 Q4 Segment Highlights: More Personal Computing Windows OEM and Devices + Windows OEM and Devices declined 7% driven by lower PC market demand and a high prior year comparable from Windows 10 end of support, partially offset by inventory builds XBOX + XBOX content and services revenue declined 1
Slide 14: Appendix
Appendix
Slide 15: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Our presentation of fourth-quarter performance includes non-GAAP financial measures. The following slides provide reconciliations between the GAAP and non-GAAP financial measures presented: * Impact from investments in OpenAl * Constant currency
Slide 16: Impact from investments in OpenAI
Impact from investments in OpenAl Three Months Ended June 30, 2026 2025 Percentage Change Y/Y on milli Non-GAAP ($ in millions, except per As Reported ‘As Adjusted As Reported ‘As Adjusted Constant : . - Constant share amounts) (aap) Adjustment” so Gaap) (Gap) Adiustment® so caapy GAAP Currency NOn-
Slide 17: Constant Currency Reconciliation
Constant Currency Reconciliation Three Months Ended June 30, 2026 2025 Percentage Change Y/Y Percentage Change Y/Y j j . . Constant Non-GAAP share amourts) nar Gon aa) “Gham” (mon canoy GAAP Nomar Curecy Ean) Cent Revenue $90,007 - $76,441 - 18% - $391 17% - Cost of Revenue $29,525 - $24,014 - 23% -
Slide 18: Constant Currency Reconciliation: Segment Revenue
Constant Currency Reconciliation Segment Revenue Three Months Ended June 30, 2026 2025 Percentage Change Y/Y Percentage Change Y/Y ($ in millions) As a rae GAAP Const Constant Currency Productivity and Business Processes $37,847 $33,112 14% $244 14% Intelligent Cloud $39,306 $29,878 32% $80 31% More
Slide 19: Constant Currency Reconciliation: Segment Cost of Revenue
Constant Currency Reconciliation Segment Cost of Revenue Three Months Ended June 30, 2026 Percentage Change Y/Y (GAAP) Constant Currency Impact Percentage Change Y/Y Constant Currency Productivity and Business Processes 16% 0% 16% Intelligent Cloud 42% 0% 42% More Personal Computing (8)% 0% (8)% Seg
Slide 20: Constant Currency Reconciliation: Segment Operating Expense
Constant Currency Reconciliation Segment Operating Expense Three Months Ended June 30, 2026 Percentage Change Y/Y Percentage Change Y/Y (GAAP) Constant Currency Impact Constant Currency Productivity and Business Processes 11% 0% 11% Intelligent Cloud 10% 0% 10% More Personal Computing 8% (1% 7% Segm
Slide 21: Constant Currency Reconciliation: Product and Service Information
Constant Currency Reconciliation Selected Product and Service Information Three Months Ended June 30, 2026 Percentage Change Y/Y (GAAP) Constant Currency Impact Percentage Caney Commercial bookings 10% 1% 11% Commercial remaining performance obligation 84% 0% 84% Microsoft Cloud revenue 27% 0% 27% M
Slide 22: Cash Flow Reconciliation
Cash Flow Reconciliation Three Months Ended June 30, ($ in millions) 2026 2025 Chonoe vr Net Cash from Operations (GAAP) $55,441 $42,647 30% Additions to Property and Equipment $(35,802) $(17,079) 110% Free Cash Flow $19,639 $25,568 (23)% Free cash flow is included as an additional clarifying item t
Slide 23: BS Microsoft
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