Microsoft just posted the 2nd 4th of its 2026 fiscal financial results. The package shaper made $81.3 cardinal successful gross and a nett income of $30.9 cardinal during Q3. Revenue is up 17 percent, and nett income has accrued by 23 percent.
The vacation 4th saw PC shipments turn unexpectedly amid an ongoing RAM shortage. Microsoft’s end of Windows 10 support helped push PC shipments up, but IDC revealed earlier this period that PC makers person besides been aggressively pulling guardant inventory to combat imaginable tariffs and ongoing world representation shortage.
Microsoft’s Windows OEM and devices gross complete this vacation play was up conscionable 1 percent year-over-year. Businesses and consumers person intelligibly been upgrading PCs and laptops during the Windows 10 extremity of life period, because Windows OEM gross connected its ain was up 5 percent. But this gross was offset by a diminution successful devices gross arsenic Microsoft combines Surface gross and Windows OEM gross together now.
Microsoft didn’t denote immoderate caller Surface devices during the caller quarter, aft launching some the 12-inch Surface Pro and 13-inch Surface Laptop successful May past year. I would expect to perceive much astir caller Surface devices successful the spring.
Microsoft’s Xbox hardware gross has declined for 3 financial years successful a row, and it looks for illustration those declining revenues are going to proceed passim fiscal 2026. Xbox hardware gross was down 32 percent year-over-year during the caller vacation quarter. Overall gaming gross was besides down 9 percent.
Xbox contented and services, which includes Game Pass, is down 5 percent, too. This diminution is mostly being attributed to stronger first-party contented capacity successful the erstwhile year, and not the Game Pass Ultimate value hike during the quarter. Unsurprisingly, Microsoft isn’t giving america an update connected Xbox Game Pass subscriber numbers. The institution past reported it had 34 cardinal subscribers astir 2 years ago, which included Xbox Game Pass Essential (previously Xbox Live Gold / Game Pass Core) members.
Microsoft has continued to people much games connected PS5, arsenic portion of its strategy to make antecedently Xbox-exclusive games disposable connected Nintendo and Sony platforms. Microsoft revealed past twelvemonth that Halo: Campaign Evolved is coming to PS5 and Xbox successful 2026, and Fable and Forza Horizon 6 are besides coming to Sony’s console this year.
Microsoft’s unreality gross was erstwhile again beardown this quarter, and moreover crossed $50 cardinal wide — up 26 percent year-over-year. Azure and different unreality services gross grew 39 percent.“ Microsoft Cloud gross crossed $50 cardinal this quarter, reflecting the beardown request for our portfolio of services,” says Microsoft CFO Amy Hood. “We exceeded expectations crossed revenue, operating income, and net per share.”
Microsoft’s Intelligent Cloud business, which includes Azure and server products, contributed $32.9 cardinal successful gross this quarter, much than double the $14.3 cardinal from the More Personal Computing business of Windows, Xbox, and Surface. In fact, the More Personal Computing section declined by 3 percent successful gross year-over-year, the only business portion to do truthful this quarter.
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