Microsoft brought 88 data centers online in the last fiscal year as part of its efforts to increase compute capacity.

Speaking during the company's Q4 FY2026 and full-year earnings call, CEO Satya Nadella noted that in the last quarter alone, the company added 31 data centers across five continents, contributing 1GW of capacity.

This follows the trend of the previous two quarters, which also saw Microsoft growing its data center capacity by 1GW each. In the full year of 2025, the company brought online 2GW.

Nadella noted that the company remains on track to "roughly double our overall capacity in just two years."

According to the company's annual report, its total footprint, including data centers, office space and other facilities, now tops 112 million sq ft (10.4m sqm). It has remaining obligations for 2027 in construction commitments of $29.85bn, along with operating and finance leases of $32.41bn. Operating and finance lease commitments after 2027 reach $411.1 billion.

Ongoing capacity constraints and supply issues were noted during the call by CFO Amy Hood.

Capex for the quarter was $41bn, which Hood said included the "impact from higher component pricing." This is a noticeable jump from the prior quarter's $31.9bn. Q2, meanwhile, was $37.5bn and Q1 $34.9bn. This brings the full-year 2026 capex to $145.3bn.

Around two-thirds went toward IT hardware, as reflected in previous quarters.

The company is projecting that Q1 of FY2027 will reach $50bn, and full-year FY2027 to around $175 billion.

Hood noted that the company is making some adjustments to its growth strategy, including that it is "extending the estimated useful life of our data centers and office buildings from 15 to 25 years, reflecting our operating history and expected use of these assets."

She added: "This change affects only the timing of future depreciation and is expected to have a minimal benefit to FY '27 operating income. The greater impact is on capital expenditures, as more of our future data center leases will shift from finance leases to operating leases as a result of this update. Finance leases are included in capital expenditures while operating leases are not."

In addition, the company has been working hard to improve operating efficiency in light of constraints. Nadella noted that in the last year, Microsoft has "reduced dock-to-live times for new GPUs in our largest regions by nearly 50 percent," while CFO Hood added that the company's revenue growth was "ahead of expectations, driven by efficiency gains across our CPU and GPU fleet as well as process improvements to enable earlier delivery of new capacity," credit for which was fiven to the engineering teams who did a lot of "good work" in incrasing available compute.

At the end of June, Microsoft held $215.87bn in servers, networking equipment, and software, the annual report said. This is up from $132.84bn at the same time last year.

Free cash flow, at $19.64bn, was down 23 percent Year-on-Year (YoY).

Total revenue for the quarter was $90 billion, more than expected, of which its Intelligent Cloud division brought in $39.3bn, up 32 percent YoY.

Azure and other cloud services, specifically, grew 43 percent.

For the first quarter of 2027, Microsoft is forecasting full company revenue of between $89.85bn and $90.95bn.

Full-year revenue was $331.8bn, up 18 percent, and operating income was $155.2bn, up 21 percent. Within this, Intelligent Cloud contributed $137.8bn in revenue, up 30 percent, and $56.97bn in operating income, up 28 percent. Azure specifically surpassed $100bn for the first time.

The company's full cloud business, including 365 and Azure, had a remaining performance obligation of $678bn, which, excluding OpenAI, increased 25 percent. CFO Hood said that the RPO, when including OpenAI held a weighted average duration of 2.3 years and roughly 30 percent will be recognized in revenue in the next 12 months, up 37 percent YoY. The remaining portion recognized beyond the next 12 months increased 112 percent.

On the company's partnership with OpenAI, Microsoft's annual report notes that through FY2026 they made $24.1bn, including "revenue sharing payments," and accounts receivable from OpenAI were $6bn. Microsoft also made funding commitments of $13bn, and has provided $11.9bn thus far.

Headcount for the company was down 5,000 compared to June 2025. The majority of job cuts were in the US, and split between R&D, sales and marketing, and general administration roles.

Following the earnings call, Microsoft's share value jumped to more than $400, but has dropped back down to $390.54 at the time of writing.