Microsoft Reports $678 Billion in Contracted Revenue Backlog
In its fiscal fourth-quarter report, Microsoft revealed a commercial remaining performance obligation of $678 billion — an 84% increase year-over-year. This backlog represents contracted revenue not yet delivered and exceeds the company’s total sales for two full years (fiscal 2026 was $331.8 billion). The figure highlights strong demand, particularly in cloud computing and AI services. Microsoft's Q4 results were robust: Revenue rose to $90 billion with a year-over-year increase of 18%, while Azure revenue grew by 43%. Operating income climbed 18% to $40.6 billion, net income increased 31%, and earnings per share jumped 32%. The company also added significant data center capacity during the quarter. Despite strong growth, only about 30% of the backlog is expected to convert into revenue within a year — roughly $200 billion. Additionally, OpenAI accounts for a large portion of Microsoft’s backlog growth; excluding it reduces the annual increase from 84% to 25%. This concentration raises concerns over dependency on one private customer.
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Topics: AI services backlog cloud computing Microsoft revenue growth