Following Microsoft’s latest quarterly earnings, CFO Amy Hood circulated her customary internal memo to employees, outlining the company’s financial performance and reinforcing its strategic priorities. As seen by Business Insider, the memo paints a picture of a company benefiting heavily from AI demand while accelerating investment across cloud infrastructure, developer tools, and custom silicon.
Hood noted that Microsoft exceeded Wall Street expectations for the quarter, delivering revenue growth of 17 percent year over year, or 15 percent in constant currency. Operating income rose even faster, increasing by 21 percent, or 19 percent in constant currency. She described the results as a strong close to the first half of the fiscal year, reflecting both execution in core businesses and momentum across newer AI-driven offerings.
One of the most notable milestones highlighted in the memo was Microsoft Cloud revenue surpassing $50 billion for the first time. According to Hood, cloud revenue grew 26 percent year over year, or 24 percent in constant currency, underlining sustained demand for Microsoft Azure and related services. She added that customers are increasingly running larger and more complex workloads on Azure, while integrating AI more deeply into their operations.
Commercial bookings were another standout metric. Hood said bookings grew by 230 percent year over year, driven largely by previously announced Azure commitments from OpenAI and Anthropic. The scale of those commitments significantly boosted reported bookings and reinforced Azure’s position as a preferred cloud for frontier AI model developers.
To support this growth, Microsoft invested a record $37.5 billion in capital expenditure during the quarter. Hood said the spending went towards GPUs, CPUs, and datacentre infrastructure, aimed at expanding Azure capacity, supporting first-party AI usage in products such as Microsoft 365 Copilot and GitHub Copilot, and giving internal research and development teams more room to innovate.
The memo also called out strong performance across Microsoft’s major business lines. Azure and other cloud services revenue grew 39 percent year over year, slightly ahead of expectations. Microsoft 365 commercial cloud revenue rose 17 percent, helped by increasing Copilot adoption. Dynamics 365 revenue grew 19 percent, while Microsoft 365 consumer cloud revenue jumped 29 percent with subscriber growth of 6 percent. Hood also highlighted gains in search and news advertising, modest growth in Windows OEM revenue, and LinkedIn revenue growth of 11 percent.
Beyond financial metrics, Hood pointed employees to strategic product milestones. She specifically mentioned last week’s announcement of the GitHub Copilot software development kit, positioning it as an important step in expanding the ecosystem for AI-powered coding tools. By opening up Copilot capabilities to developers through an SDK, Microsoft is signalling its intent to make Copilot a broader platform rather than a closed feature.
Hood also referenced the recent unveiling of Microsoft’s Maia 200 AI chip, which is designed to strengthen the company’s in-house AI hardware capabilities. Together, the Copilot SDK and Maia 200 reflect Microsoft’s effort to build vertically across the AI stack, from infrastructure and silicon to developer tools and end-user products.
In closing, Hood emphasised quality, security, and trust, saying these remain central as customers increasingly rely on Microsoft for mission-critical workloads. Her message reinforced a consistent theme. Microsoft is investing aggressively, scaling quickly, and positioning AI as a foundational layer across its business as it enters the second half of the fiscal year
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