Microsoft Q3 Revenue Climbs 18% to $82.9B as AI ARR Hits $37B
Microsoft’s Q3 FY26 net income rose 23% year-over-year to $31.8bn on revenue growth of 18% to $82.9bn, with operating income up 20% at $38.4bn. Azure and cloud services drove growth, with Intelligent Cloud revenue up 30% to $34.7bn and AI business ARR surging 123% to $37bn.
1. Q3 FY26 Financial Highlights
Microsoft reported Q3 FY26 net income of $31.8bn, a 23% increase year-over-year, on revenue of $82.9bn, up 18%. Operating income rose 20% to $38.4bn, reflecting broad-based growth across its core businesses.
2. Cloud and AI Performance
Intelligent Cloud revenue jumped 30% to $34.7bn, driven by a 40% gain in Azure and other cloud services. The AI business reached an annual revenue run rate of $37bn, up 123%, and commercial remaining performance obligations nearly doubled to $627bn.
3. Segment Trends
Productivity and Business Processes revenue climbed 17% driven by a 17% increase in Microsoft 365 Commercial products and 26% growth in consumer services. More Personal Computing revenue dipped 1% to $13.2bn as Windows and Gaming sales fell, while search advertising grew 9%.