Microsoft posted fiscal 2026 fourth-quarter results that beat market expectations, highlighting growth in its cloud business. The stock rose about 3 percent in after-hours trading after the results.

Microsoft said revenue for the fourth quarter ended June 30 came to $90.01 billion. That topped the $87.62 billion estimate compiled by market research firm LSEG. Adjusted earnings per share came to $4.74, above the market estimate of $4.24.

Net income rose to $35.77 billion, or $4.81 per share, from $27.23 billion, or $3.65 per share, a year earlier.

The company said a $3.2 billion valuation gain on its investment in generative AI startup Anthropic and lower-than-expected costs for its voluntary retirement program contributed to the improvement.

Revenue from the Intelligent Cloud segment, a key growth driver, rose 31.6 percent from a year earlier to $39.31 billion. Azure cloud revenue grew 43 percent, up from 40 percent in the prior quarter and above market expectations. Microsoft said fiscal 2026 annual Azure revenue topped $100 billion for the first time.

The Productivity and Business Processes segment posted revenue of $37.85 billion, supported by growth in Office, Dynamics and LinkedIn. Paid seats for Microsoft 365 Copilot topped 30 million.

Revenue from the More Personal Computing segment, which includes Bing, Windows, Surface and Xbox, fell 4.4 percent to $12.85 billion. Device sales and Windows licensing revenue from PC makers also fell 7 percent.

An expansion in AI infrastructure led to higher costs. Quarterly capital expenditures and finance leases surged 69 percent from a year earlier to $41.0 billion, and free cash flow fell 23 percent to $19.64 billion. Commercial remaining performance obligations, which are expected to translate into future revenue, rose 8 percent from the previous quarter to $678.0 billion, showing demand from corporate customers remains solid, CNBC reported.