Microsoft’s Fiscal Third Quarter Highlights
Microsoft reported an 18% year-over-year revenue increase to approximately $83 billion for the fiscal third quarter, with operating income rising 20% year-over-year. However, the company’s commercial backlog saw only a marginal sequential increase to $627 billion, up just $2 billion from the previous quarter.
Azure revenue grew 40% year-over-year, but the growth rate remained flat at 39% in constant currency, reflecting no substantial acceleration despite significant investment. Microsoft is projecting capital expenditures of around $190 billion for calendar 2026, a 61% increase from the previous year, contributing to a 22% decline in free cash flow to $15.8 billion for the quarter.
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