Palantir Is Down 30%: Noise? Or a Signal to Accumulate?<\/a><\/p>\nChief Financial Officer Amy Hood said demand continues to exceed available capacity. In Intelligent Cloud, she said Azure results were ahead of expectations because Microsoft \u201cdelivered capacity earlier in the quarter,\u201d enabling increased consumption across AI and non-AI services. Hood added that \u201cstrong customer demand across workloads, customer segments, and geographic regions continues to exceed available capacity.\u201d<\/p>\n
Copilot, GitHub, and agent adoption across the portfolio <\/p>\n
Nadella said Microsoft is evolving Copilot \u201cfrom synchronous assistants to async coworkers\u201d that can execute long-running tasks. In Microsoft 365 Copilot, he reported a record quarter for seat additions, with paid seats now above 20 million. Nadella said seat adds increased 250% year-over-year and that Accenture has more than 740,000 seats, calling it Microsoft\u2019s largest Copilot win to date. He also cited customer commitments of 90,000 or more seats from Bayer, Johnson & Johnson, Mercedes, and Roche.<\/p>\n
Nadella pointed to usage trends, saying first-party agent monthly active usage is up 6x year-to-date and Copilot queries per user rose nearly 20% quarter-over-quarter. He said weekly engagement is \u201cnow at the same level as Outlook.\u201d<\/p>\n
In developer tools, Nadella said nearly 140,000 organizations use GitHub Copilot and enterprise subscribers \u201chave nearly tripled\u201d year-over-year. He also said Microsoft recently announced a shift to usage-based pricing for GitHub Copilot.<\/p>\n
In business applications, Nadella said customers are increasingly moving to \u201cseats plus consumption,\u201d noting that nearly 60% of Microsoft\u2019s customer service category customers are purchasing usage-based credits. He cited HSBC\u2019s use of pre-built agents with Dynamics 365, saying it reduced issue resolution time by over 30%.<\/p>\n
In security, Nadella said the number of Security Copilot customers increased 2x year-over-year. He added that data security triage agents handled over 2 million unique alerts in the quarter and that 35 billion Copilot interactions have been audited by Purview to date, up 7x year-over-year.<\/p>\n
Nadella also highlighted consumer metrics, including Windows monthly active devices surpassing 1.6 billion, Edge taking share for 20 consecutive quarters, and Bing reaching 1 billion monthly active users for the first time.<\/p>\n
Financial results: revenue, margins, and capital spending <\/p>\n
Hood said the company exceeded expectations across revenue, operating income, and earnings per share. Revenue was $82.9 billion, up 18% (15% in constant currency). Gross margin dollars increased 16% (13% in constant currency), and operating income grew 20% (16% in constant currency). Earnings per share was $4.27, up 21% (18% in constant currency), which Hood said was adjusted for the impact from Microsoft\u2019s investment in OpenAI.<\/p>\n
Company gross margin percentage was 68%, down year-over-year, which Hood attributed to continued AI infrastructure investment and growing AI product usage, partially offset by efficiency gains, \u201cparticularly in Azure and M365 Commercial Cloud.\u201d Operating expenses increased 9% (8% in constant currency), driven by AI investment in R&D compute capacity, talent, and data. Operating margins increased slightly to 46%, and Hood said headcount declined year-over-year.<\/p>\n
Capital expenditures were $31.9 billion, down sequentially due to variability in cloud build-outs and finance lease timing. Hood said roughly two-thirds of CapEx was for short-lived assets such as GPUs and CPUs, with the remainder for long-lived assets supporting monetization over \u201cthe next 15 years and beyond.\u201d The company reported $46.7 billion in cash flow from operations, up 26%, and free cash flow of $15.8 billion. Microsoft returned $10.2 billion to shareholders through dividends and share repurchases.<\/p>\n
By segment, Hood reported:<\/p>\n
Productivity and Business Processes: Revenue of $35.0 billion, up 17% (13% constant currency). Microsoft 365 commercial cloud revenue grew 19% (15% constant currency). LinkedIn revenue rose 12% (9% constant currency). Dynamics 365 revenue increased 22% (17% constant currency), though bookings were impacted by weaker renewals as customers balanced per-seat and \u201cseats plus consumption.\u201d<\/p>\n
Intelligent Cloud: Revenue of $34.7 billion, up 30% (28% constant currency). Azure and other cloud services revenue grew 40% (39% constant currency).<\/p>\n
More Personal Computing: Revenue of $13.2 billion, down 1% (3% constant currency). Search advertising revenue ex-TAC increased 12% (9% constant currency). Gaming revenue declined 7% (9% constant currency).<\/p>\n
Outlook: higher Q4 CapEx, ongoing constraints, and model evolution <\/p>\n
For the fourth quarter, Hood guided to total company revenue of $86.7 billion to $87.8 billion, implying 13% to 15% growth. She said Microsoft Cloud gross margin percentage should be roughly 64%, down year-over-year, driven by AI investments and increased GitHub Copilot usage.<\/p>\n
Segment guidance included Productivity and Business Processes revenue of $37.0 billion to $37.3 billion, Intelligent Cloud revenue of $37.95 billion to $38.25 billion, and More Personal Computing revenue of $11.75 billion to $12.25 billion. Hood said Azure revenue growth is expected to be 39% to 40% in constant currency, with demand still exceeding supply.<\/p>\n
Hood said the Q4 outlook includes roughly $900 million in one-time costs related to a voluntary retirement program\u2014about $350 million in cost of goods sold and $550 million in operating expenses.<\/p>\n
On capital spending, Hood said Q4 CapEx is expected to increase to \u201cover $40 billion\u201d as Microsoft brings more capacity online, including roughly $5 billion related to higher component pricing and finance lease timing. For calendar year 2026, Hood said Microsoft expects to invest roughly $190 billion in capital expenditures, including about $25 billion from higher component pricing. She said Microsoft expects to remain capacity constrained \u201cat least through 2026.\u201d<\/p>\n
During Q&A, Hood and Nadella repeatedly emphasized a shift toward \u201cper-user and usage\u201d business models, with Hood describing an evolution from traditional license bookings toward a mix of license and metered consumption. Nadella said the dollars supporting AI spend ultimately need to come from measurable business outcomes, including cost reductions or revenue gains. He added that seat-based pricing can provide predictability, with consumption and \u201coverages\u201d expanding beyond a base level of usage entitlement.<\/p>\n
Microsoft also addressed its relationship with OpenAI. Nadella said Microsoft remains \u201cvery focused\u201d on maintaining a \u201cwin-win construct,\u201d noting access to a \u201cfrontier model, royalty-free\u201d through 2032 and describing OpenAI as a large customer across AI and broader compute. Hood added that revenue share predictability through 2030 is a \u201creal positive,\u201d and referenced \u201cthe elimination of our rev share to them\u201d while emphasizing Microsoft\u2019s royalty-free IP access.<\/p>\n
About Microsoft (NASDAQ:MSFT) <\/p>\n
Microsoft Corporation is a global technology company headquartered in Redmond, Washington. Founded in 1975 by Bill Gates and Paul Allen, Microsoft develops, licenses and supports a broad range of software products, services and devices for consumers, enterprises and governments worldwide. Its operations span personal computing, productivity software, cloud infrastructure, enterprise applications, developer tools and gaming.<\/p>\n
Microsoft’s product portfolio includes the Windows operating system and the Microsoft 365 suite of productivity and collaboration tools (Office apps, Outlook, Teams).<\/p>\n
The article “Microsoft Q3 Earnings Call Highlights<\/a>” was originally published by MarketBeat.<\/p>\n","protected":false},"excerpt":{"rendered":"Microsoft logo Key Points Microsoft delivered a record quarter with revenue of $82.9 billion (up 18% YoY), Microsoft…\n","protected":false},"author":2,"featured_media":22454,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[15552,420,7829,15551,8245,320,419,7828,2806],"class_list":{"0":"post-22453","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-microsoft","8":"tag-amy-hood","9":"tag-azure","10":"tag-azure-ai","11":"tag-capacity-constraints","12":"tag-github-copilot","13":"tag-microsoft","14":"tag-microsoft-365","15":"tag-microsoft-ai","16":"tag-satya-nadella"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/22453","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=22453"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/22453\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/22454"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=22453"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=22453"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=22453"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Microsoft](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/04\/1990d8dd3c112c9ed828e81a828305ce.png\")
Microsoft logo Key Points <\/p>\n