Microsoft has reported its financial results for the third quarter of fiscal year 2026, highlighting continued growth across its cloud and artificial intelligence businesses. The company generated $82.9 billion in revenue for the quarter ending March 31, 2026, marking an 18 percent increase compared to the same period last year .
Operating income reached $38.4 billion, up 20 percent year over year, while net income rose to $31.8 billion, reflecting a 23 percent increase on a GAAP basis . Diluted earnings per share also climbed to $4.27, representing a 23 percent rise compared to the previous year . The company noted that non-GAAP results exclude the impact of its investments in OpenAI, which had a minimal effect on earnings during the quarter .
A significant portion of Microsoft’s growth continues to come from its cloud division. Microsoft Cloud generated $54.5 billion in revenue, an increase of 29 percent year over year . Within this segment, Azure and other cloud services stood out with a 40 percent revenue increase, underscoring strong demand for cloud infrastructure and AI driven solutions . The company also reported that its commercial remaining performance obligation, a measure of future contracted revenue, grew 99 percent to $627 billion .
The Productivity and Business Processes segment delivered $35.0 billion in revenue, up 17 percent year over year . Growth in this category was supported by Microsoft 365, with commercial cloud revenue rising 19 percent and consumer cloud revenue increasing 33 percent . LinkedIn and Dynamics 365 also posted gains of 12 percent and 22 percent respectively .
Meanwhile, the Intelligent Cloud segment brought in $34.7 billion, reflecting a 30 percent increase year over year . In contrast, the More Personal Computing segment reported $13.2 billion in revenue, representing a slight 1 percent decline . Within this category, Xbox content and services revenue fell by 5 percent, while Windows OEM and Devices revenue dipped by 2 percent . Search advertising, however, showed positive momentum with a 12 percent increase .
Microsoft returned $10.2 billion to shareholders during the quarter through dividends and share repurchases . Company leadership emphasized that ongoing investments in cloud infrastructure and AI capabilities continue to play a central role in its performance, with its AI business surpassing an annual revenue run rate of $37 billion .
