Microsoft Q3 FY2026: Revenue Hits $82.89B, Azure Up 40%, AI Business Reaches $37B ARR

Microsoft reported Q3 FY2026 revenue of $82.89 billion, up 18% year-over-year, beating analyst estimates of $81.39 billion. Azure and cloud services grew 40%, while the AI business surpassed $37 billion in annual recurring revenue, up 123% YoY. Microsoft Cloud revenue reached $54.5 billion, up 29%. The company guided $190 billion in capital expenditure for 2026, well above the $147 billion analyst consensus, which triggered a ~5% stock decline as investors questioned the ROI timeline. Microsoft 365 Copilot has 20 million paid seats, up from 15 million in January.