Microsoft's Financials: AI Capex, Azure and Copilot Growth

Microsoft ended its 2026 financial year on 30 June with revenue of US$331.8bn, up 18%, and net income of $133.7bn, up 31%. 

Its latest Q1 2027 update shows an increased revenue to US$92.3bn. 

Azure passed US$100bn in annual revenue for the first time at the end of Microsoft’s FY 2025,  and its Q1 2027 results deliver an update of increased revenue by 48% year on year. 

Paying for that demand is the job of Amy Hood, CFO since 2013. 

Capital expenditure was US$41bn in the June quarter alone, and Microsoft expects about US$175bn for calendar 2026, Microsoft shared on its Q4 2025 earnings call. 

Amy told investors that capex will be above US$50bn in the September quarter and will grow again across the 2027 financial year, according to Fortune. 

During the Q4 2025 announcement, Amy Hood, EVP and CFO of Microsoft noted that “customer demand continues to exceed available capacity”.

The journey up for Amy Hood 

Amy joined Microsoft in 2002 in investor relations after a career at Goldman Sachs in investment banking and capital markets.

She later served as Chief of Staff in the Server and Tools Business and led strategy and business development in the Business division before becoming the company's first female CFO in December 2013. 

She has now steered the finances through the cloud transition and into the most capital-intensive period in Microsoft's history.

The strategy she describes is to build capacity fast while keeping spending flexible. Roughly two thirds of fourth-quarter capex went on short-lived assets such as GPUs and CPUs. 

Land and data centre builds, Amy said on the July 2026 call, can be slowed if demand changes, and she described the infrastructure as “pretty fungible” across Azure, Copilot and internal research. 

From the start of the 2027 financial year Microsoft extended the useful life of data centre and office buildings from 15 to 25 years, and more future leases will be operating rather than finance leases, which lowers reported 2026 capex from about US$190bn to US$175bn without changing actual spending.

The returns are showing up in the numbers. Microsoft Cloud revenue reached US$59.3bn in the June quarter, up 27%, and Azure grew 43%, with about 45% growth guided for the September quarter. 

More than 30 million Microsoft 365 Copilot seats are now paid for. Inside Microsoft, the finance team calls itself “customer zero” and says it is embedding AI across all finance functions, running its processes on Azure, Dynamics 365, Microsoft 365 and Power Platform.

Speaking about the Q1 2027 results, Amy says: “Results exceeded expectations across revenue, operating income, and earnings per share”. 

Q1 2027 has shown that Microsoft Cloud revenue increased 30% to US$63.9bn. 

Overall Q1 results show that the company had a net income increase of 32% YoY to US$36.6bn on a GAAP basis. 

“We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack,” notes Satya Nadella, Chairman and CEO of Microsoft. 

“By helping organisations build and own their own intelligence, and earning trust through agent safety and security, we are translating our innovation into growing adoption and real-world impact across every industry.”