Microsoft’s AI cash engine

Microsoft is turning artificial intelligence into current revenue, not just future promises, with cloud sales and Copilot subscriptions both rising. (microsoft.com) In the quarter ended December 31, 2025, Microsoft reported $81.3 billion in revenue, $4.14 in non-Generally Accepted Accounting Principles earnings per share, and 39% growth in Azure and other cloud services. (microsoft.com) (cnbc.com) The company said Microsoft Cloud revenue reached $51.5 billion, up 26%, and commercial remaining performance obligation — contracted revenue to be recognized later — climbed 110% to $625 billion. (microsoft.com) That backlog figure matters because it shows Microsoft selling two layers of the artificial intelligence stack at once: computing capacity through Azure and software through products such as Microsoft 365 Copilot. Microsoft said it now has 15 million paid Microsoft 365 Copilot seats. (microsoft.com) (cnbc.com) Azure is Microsoft’s rented computing business, where companies buy processing power and storage instead of building their own data centers. Copilot is the software layer on top, where customers pay to use artificial intelligence inside Word, Excel, Teams, and other Microsoft products. (finance.yahoo.com) Microsoft’s own numbers show both businesses moving together. Productivity and Business Processes revenue rose 16% to $34.1 billion, while Microsoft 365 Commercial cloud revenue increased 17%, helped by Copilot and higher-end E5 security and compliance plans. (microsoft.com 1) (microsoft.com 2) The spending side is rising just as fast. CNBC reported Microsoft recorded $37.5 billion in quarterly capital expenditures and finance leases, and the company said operating expenses will include more investment in artificial intelligence computing capacity and talent. (cnbc.com) The $625 billion contract pile is also unusually concentrated. Microsoft said 45% of commercial remaining performance obligation is tied to OpenAI, after OpenAI made a $250 billion cloud commitment during the quarter. (cnbc.com) (techcrunch.com) Investors still pushed the stock lower after the January 28, 2026 report because Microsoft guided to 37% to 38% Azure growth for the next quarter and a roughly 45.1% operating margin, slightly below Wall Street expectations. (cnbc.com) Microsoft’s quarter showed a company collecting money from artificial intelligence in the data center and on the desktop at the same time. Satya Nadella said Microsoft has already built an artificial intelligence business “larger than some of our biggest franchises,” and the company’s latest results put numbers behind that claim. (microsoft.com)