Microsoft Corporation reported a significant increase in earnings for the second quarter of fiscal 2026, driven primarily by rapid adoption of artificial intelligence and record performance in its cloud division.
The company announced that its revenue for the quarter ending December 31, 2025 reached $81.3 billion, an increase of 17% from the same period last year.
Net income also increased by 60% to $38.5 billion.
A standout performer was the Microsoft Cloud division, with quarterly revenue exceeding $50 billion for the first time, increasing from $40.9 billion in Q2 FY25 to $51.5 billion in Q2 FY26.
Chief Executive Officer Satya Nadella described the results as “the early stages of AI adoption” and said the company has been successful in turning large investments in artificial intelligence into tangible business value.
Microsoft’s flagship cloud platform, Azure, grew 39% as businesses increasingly moved workloads to the cloud to take advantage of new AI tools.
Capital spending for the quarter reached $37.5 billion, an increase of 66%. Microsoft said roughly two-thirds of that funding went toward data center CPUs and GPUs needed to power next-generation AI.
While the “Intelligent Cloud” and “Productivity” divisions saw strong growth, the “More Personal Computing” division, which includes Xbox and Content Services, saw a 5% decline in revenue.
Xbox hardware revenue was down 32%.
But Windows 11 is now used by more than 1 billion people, and the company maintains a huge footprint worldwide.
