Microsoft CFO tells employees the company's biggest AI bets are paying off

Microsoft's latest net were arsenic overmuch astir reassurance arsenic results.

In a memo to labor aft the institution reported quarterly earnings, CFO Amy Hood pointed to Azure's maturation and Copilot's momentum arsenic grounds that Microsoft's biggest AI bets are paying off, moreover arsenic the institution spends tens of billions of dollars to support gait successful the AI race.

"We statesman this caller twelvemonth pinch clear priorities, beardown customer demand, and important opportunity ahead," Hood wrote successful the memo, recapping Microsoft's 4th fourth and fiscal year. "At the aforesaid time, capturing the opportunity successful beforehand of america will require america to proceed evolving, raising our ambition, and uncovering caller ways to present for our customers."

Hood sends these emails to labor each 4th erstwhile Microsoft discloses its financials.

The emails mostly repetition what the institution reports publically — specified arsenic really gross and profit are growing, aliases what is discussed connected expert net calls — but they supply immoderate penetration into what Microsoft executives deem astir important, and what they want labor to know.

The latest memo touted "important advancement successful cardinal areas" for illustration the company's Azure unreality business and its Copilot AI wrong its suite of Microsoft 365 applications.

As Business Insider precocious reported, these 2 important businesses person faced unit arsenic the generative AI roar drives soaring request for computing capacity and fuels accelerated advances by competitors. Hood's accent connected some businesses suggests Microsoft believes it is opening to upwind those headwinds.

Hood besides highlighted Microsoft invested much than $41 cardinal successful superior expenditures during the 4th to grow information halfway capacity and reiterated a connection Microsoft executives person emphasized for much than a year: information remains a apical priority.

Read the memo:

"Team,

Thank you each for a beardown decorativeness to our fiscal year.

Our Q4 results exceeded the outlook for gross and operating income that we shared pinch Wall Street and we showed important advancement successful cardinal areas for illustration Azure and M365 Copilot.

You tin spot our net announcement here. Microsoft Cloud gross was $59.3 cardinal successful Q4 and $214 cardinal for the afloat fiscal year, increasing 27% crossed some clip periods.

Commercial bookings grew 18%, excluding OpenAI, driven by spot crossed our halfway annuity business. Commercial remaining capacity obligation, which is simply a measurement of the business we already person nether contract, accrued to $678 billion, up complete $50 cardinal sequentially.

Thank you for staying focused connected security, quality, and reliability. The spot customers spot successful america to powerfulness their astir important workloads is earned each time done the activity you do.

A fewer different cardinal points from the quarter:

• We generated $19.6 cardinal successful free rate flow, highlighting the spot of our business and the elasticity it creates.
• We invested complete $41 cardinal successful capex to support the request we proceed to see. A large convey you to our infrastructure teams for bringing caller capacity online and to our engineering teams for creating efficiencies that alteration america to do much pinch each gigawatt we deploy.
• Azure and different unreality services gross maturation accelerated to 43%. And for FY26, Azure surpassed $100 cardinal successful revenue, up 41%.
• Microsoft 365 commercialized unreality gross accrued 16% connected an adjusted basis, up of expectations. Building connected the Copilot momentum we saw successful Q3, nett paid spot adds much than doubled sequentially and are now complete 30 million.
• Microsoft 365 user unreality gross accrued 24% pinch subscriber maturation of 7%.
• Search advertizing gross ex-TAC accrued 10%, and Bing and Edge some took stock again this year.
• Windows OEM and Devices gross decreased 7%, which is higher than wide PC marketplace demand, arsenic our OEM and transmission partners continued to build inventory successful consequence to higher constituent prices.
• XBOX contented and services gross decreased 10%, against a prior-year 4th that benefited from beardown first-party content. During the quarter, Forza Horizon 6 saw beardown subordinate reception, reaching a grounds 6 cardinal players successful its first 2 days.
• And, LinkedIn gross accrued 12% chiefly driven by Marketing Solutions.

Before we move the last page connected FY26, I want to admit what we accomplished together. It was a twelvemonth of meaningful advancement arsenic we expanded capacity, improved our merchandise quality, evolved business models, and changed really we run thru caller rhythms for illustration cohorts and missions. We built momentum passim the twelvemonth and delivered our strongest execution and operating capacity successful the last 4th of the year. Most importantly, we remained grounded that our ain occurrence astatine Microsoft will not travel unless we proceed to create meaningful worth for our customers and thief them accelerate their ain growth.

Thank you to teams crossed the institution for the focus, discipline, and committedness you brought each day. From quality, security, and compliance to the countless decisions that improved really we service customers, your activity made an impact. The results we delivered successful FY26 and the momentum we transportation into FY27 are a nonstop reflection of your efforts.

We statesman this caller twelvemonth pinch clear priorities, beardown customer demand, and important opportunity ahead. At the aforesaid time, capturing the opportunity successful beforehand of america will require america to proceed evolving, raising our ambition, and uncovering caller ways to present for our customers. I'm assured successful what we tin execute together and excited for what comes next.

To perceive much specifications astir the 4th and our outlook for Q1, you tin subordinate unrecorded coming astatine 2:30PM Pacific Time, perceive on-demand, aliases publication the transcript connected the Investor Relations website.

With appreciation and gratitude,  

Amy"