Microsoft Azure Passes $100bn as Copilot Reaches 30m Paid Seats

Microsoft has reported that Azure revenue surpassed $100 billion for the first time in its 2026 financial year, while Microsoft 365 Copilot reached more than 30 million paid seats. The figures arrived with the company’s fourth-quarter results on 29 July, covering the three months to 30 June.

Quarterly revenue reached $90.01 billion, up 18% year on year and ahead of the $87.62 billion consensus cited by CNBC. GAAP net income rose 31% to $35.8 billion, or $4.81 per share. Microsoft’s adjusted earnings per share were $4.74, above the $4.24 expectation reported by CNBC.

It is a decisive update to the AI infrastructure and cloud spending story that had been in focus ahead of Microsoft’s results. The company has now provided the hard numbers: Azure and other cloud services grew 43% in the quarter, accelerating from 40% in the preceding quarter and beating the roughly 40% growth analysts had expected.

Azure clears a major milestone

Azure’s annual revenue passed $100 billion after growing 41% across the full fiscal year. Microsoft does not break out every part of its cloud business in the same way as rivals, but at this scale Azure remains behind Amazon Web Services and ahead of Alphabet’s Google Cloud.

Intelligent Cloud revenue, the division containing Azure, rose 32% to $39.3 billion in the quarter. Microsoft Cloud revenue overall climbed 27% to $59.3 billion. Amy Hood, Microsoft’s chief financial officer, said: “We delivered a strong quarter to close out the fiscal year, highlighted by Microsoft Cloud revenue of $59.3 billion, up 27% year-over-year.”

The company’s forecast points to more momentum ahead. Hood projected Azure growth of 45% at constant currency for Microsoft’s fiscal first quarter, above StreetAccount’s 41.4% consensus. However, demand is still exceeding available Azure capacity, which Microsoft says could constrain near-term growth.

Microsoft spent heavily to support that demand. Capital expenditure and finance leases reached $41 billion in the quarter, up 69% year on year. Hood said the company had revised its calendar 2026 capital expenditure forecast to roughly $175 billion from about $190 billion, after extending the assumed useful life of office and data centre properties from 15 to 25 years.

Copilot’s paid-seat climb accelerates

Microsoft 365 Copilot’s 30 million paid seats are the other standout number. The service had more than 20 million paid seats in April and 15 million in January, meaning the latest increase is its largest quarterly seat gain so far. Microsoft said net seat additions more than doubled quarter on quarter, while user satisfaction scores have doubled over the past three quarters.

“We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results. This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation.”

Microsoft chief executive Satya Nadella also said hundreds of enterprise customers had bought millions of seats through high-end E7 productivity bundles. The number of customers purchasing more than 50,000 seats grew more than sevenfold year on year.

Even so, Copilot’s reach should be kept in perspective. Microsoft does not disclose standalone Copilot revenue, folding it into its commercial and consumer cloud reporting. Its 30 million paid seats represent less than 7% of the Microsoft 365 base, which can be estimated at roughly 464 million paid seats using the company’s previously reported figure of more than 450 million in January.

GitHub Copilot is growing too, with Nadella saying the coding assistant now has 50 million users. That is a total-user figure, including free and trial users, rather than a paid-subscriber count. The latest confirmed paid figure was 4.7 million in January.

What it means for UK customers

For UK organisations, the results make Copilot harder to dismiss as an experimental add-on. Microsoft’s published UK pricing varies by licence tier and sales channel. Copilot for Microsoft 365 has a headline list price of £24.70 per user per month on an annual commitment, excluding VAT, equivalent to £296.40 a year per user. A £13.80-per-user monthly promotional rate, paid annually, runs until 30 September 2026, after which the stated standard rate is £16.10; buyers should check current pricing with Microsoft or a reseller.

That is particularly relevant after Microsoft 365 prices rose by up to 33% on 1 July. A Copilot rollout may be easier to justify where it replaces existing work, but the licence bill becomes significant quickly at enterprise scale. Microsoft’s results also show why the company is introducing usage-based billing alongside per-seat licences for Copilot, Cowork and GitHub Copilot.

For the UK public sector and larger businesses already piloting Microsoft’s AI tools, Azure’s forecast and Copilot’s adoption figures suggest the service is being pushed into a more mature commercial phase. Microsoft has also said it will invest $30 billion in UK AI infrastructure and operations between 2025 and 2028, following its earlier £2.5 billion commitment to expand next-generation AI infrastructure in the country.

Microsoft shares rose 8% in extended trading on Wednesday following the results. The immediate question is whether it can keep converting AI demand into revenue fast enough while expanding the data centre capacity needed to serve it.