Microsoft CFO's email to staff has a message on the company's biggest AI bets

Microsoft CFO Amy Hood told employees that the company’s biggest AI investments are paying off, citing string growth in Azure and momentum for Copilot. According to a report by Business Insider, in her quarterly memo following earnings, Hood emphasised that these businesses are showing ‘important progress’ even as Microsoft spends tens of billions to expand data center capacity and keep pace in the AI race. Microsoft report $90 billion in fourth-quarter revenue, surpassing Wall Street forecasts. Cloud revenue reached $59.3 billion in Q4 and $214 billion for the fiscal year, growing 27%. Azure revenue growth accelerated to 43%, with the cloud business surpassing $100 billion annually. Copilot adoption also surged, with net paid seat adds more than doubling sequentially to over 30 million.Microsoft earnings beat expectations Hood also Microsoft’s $41 billion in capital expenditures during the quarter to expand infrastructure, thanking engineering and infrastructure teams for efficiencies that maximize capacity. She reiterated that security remains a top priority, stressing that customer trust is earned daily through reliability and quality. Other highlights included $19.6 billion in free cash flow, 16% growth in Microsoft 365 commercial cloud revenue, and 24% growth in consumer cloud revenue. LinkedIn revenue rose 12%, while Xbox content and services fell 10% compared to a strong prior-year quarter. Windows OEM and Devices revenue decreased 7%, reflecting inventory adjustments by partners.In closing, Hood praised teams for discipline and commitment, noting that Microsoft’s success depends on creating meaningful value for customers. “We begin this new year with clear priorities, strong customer demand, and significant opportunity ahead. At the same time, capturing the opportunity in front of us will require us to continue evolving, raising our ambition, and finding new ways to deliver for our customers,” she wrote.Read Microsoft CFO Amy Hood's email to employees here "Team,Thank you all for a strong finish to our fiscal year.Our Q4 results exceeded the outlook for revenue and operating income that we shared with Wall Street and we showed important progress in key areas like Azure and M365 Copilot.You can see our earnings announcement here. Microsoft Cloud revenue was $59.3 billion in Q4 and $214 billion for the full fiscal year, growing 27% across both time periods.Commercial bookings grew 18%, excluding OpenAI, driven by strength across our core annuity business. Commercial remaining performance obligation, which is a measure of the business we already have under contract, increased to $678 billion, up over $50 billion sequentially.Thank you for staying focused on security, quality, and reliability. The trust customers place in us to power their most important workloads is earned every day through the work you do.A few other key points from the quarter:* We generated $19.6 billion in free cash flow, highlighting the strength of our business and the flexibility it creates.* We invested over $41 billion in capex to support the demand we continue to see. A big thank you to our infrastructure teams for bringing new capacity online and to our engineering teams for creating efficiencies that enable us to do more with every gigawatt we deploy.* Azure and other cloud services revenue growth accelerated to 43%. And for FY26, Azure surpassed $100 billion in revenue, up 41%.* Microsoft 365 commercial cloud revenue increased 16% on an adjusted basis, ahead of expectations. Building on the Copilot momentum we saw in Q3, net paid seat adds more than doubled sequentially and are now over 30 million.* Microsoft 365 consumer cloud revenue increased 24% with subscriber growth of 7%.* Search advertising revenue ex-TAC increased 10%, and Bing and Edge both took share again this year.* Windows OEM and Devices revenue decreased 7%, which is higher than overall PC market demand, as our OEM and channel partners continued to build inventory in response to higher component prices.* XBOX content and services revenue decreased 10%, against a prior-year quarter that benefited from strong first-party content. During the quarter, Forza Horizon 6 saw strong player reception, reaching a record 6 million players in its first two days.* And, LinkedIn revenue increased 12% primarily driven by Marketing Solutions.Before we turn the final page on FY26, I want to recognize what we accomplished together. It was a year of meaningful progress as we expanded capacity, improved our product quality, evolved business models, and changed how we operate thru new rhythms like cohorts and missions. We built momentum throughout the year and delivered our strongest execution and operating performance in the final quarter of the year. Most importantly, we remained grounded that our own success at Microsoft will not come unless we continue to create meaningful value for our customers and help them accelerate their own growth.Thank you to teams across the company for the focus, discipline, and commitment you brought every day. From quality, security, and compliance to the countless decisions that improved how we serve customers, your work made an impact. The results we delivered in FY26 and the momentum we carry into FY27 are a direct reflection of your efforts.We begin this new year with clear priorities, strong customer demand, and significant opportunity ahead. At the same time, capturing the opportunity in front of us will require us to continue evolving, raising our ambition, and finding new ways to deliver for our customers. I'm confident in what we can achieve together and excited for what comes next.To hear more details about the quarter and our outlook for Q1, you can join live today at 2:30PM Pacific Time, listen on-demand, or read the transcript on the Investor Relations website.With appreciation and gratitude, Amy"Get the latest technology news and updates. Download the TOI App.