Microsoft Posts Record Revenue; Satya Nadella Announces AI “Super-App” as Next Step

Microsoft is enjoying a strong financial year. After investing billions of dollars in infrastructure and its cloud services business, the tech giant has reported better-than-expected figures. Its core cloud business, Azure, surpassed $100 billion in revenue for the first time. Now, Satya Nadella has announced the upcoming launch of an AI super-app, with which the company aims to rival firms such as OpenAI and Anthropic.

Satya Nadella shared details from Microsoft’s report on X, describing it as a “record fiscal year for Microsoft.” He revealed that the company’s annual revenue exceeded $331 billion, with $214 billion coming from the cloud business. To put this in perspective, Egypt’s nominal GDP stood at $349 billion for 2025.

In Development: Microsoft’s AI Super-App

During the earnings call, Satya Nadella teased that Copilot is rapidly evolving beyond a simple chatbot, moving closer to the concept of an AI super-app. “This quarter, we are unifying Copilot experiences—including coding—into a single super-app… It’s a major step forward, and I look forward to sharing more details soon,” he stated.

This means that Microsoft could soon launch a super-app capable of performing a wide range of tasks using AI tools from a single interface. This would place the company in direct competition with OpenAI and Anthropic, two AI labs that dominate the use of this technology in the corporate sector. Early reports indicate that this “super-app” would integrate the Copilot chatbot, the GitHub Copilot coding assistant, Copilot Cowork, and the Autopilot system. It would be similar to OpenAI’s ChatGPT Work app, which combines ChatGPT with its Codex coding tool.

Satya Nadella revealed that Microsoft is gaining independence regarding AI models and the development of its own chips. “That is really the enterprise design architecture we are going to promote. We are using it ourselves,” Nadella stated. Previously, Microsoft relied on OpenAI for the foundational AI models powering products like Copilot. The company was an early investor in the AI startup and retains an equity stake in it.

Microsoft reported that Copilot adoption has increased. The number of paid licenses for M365 Copilot surpassed 30 million, up from 20 million in the previous quarter.

Microsoft Surpasses Google and Meta in Free Cash Flow

During its earnings release, Microsoft reported free cash flow of $19.6 billion. This figure exceeded analysts’ estimates of $13.44 billion, although it represented a 23% decrease compared to the previous year.

To put this in context, Google recently recorded negative free cash flow for the first time in 22 years, while Meta saw a 91% drop in its cash reserves, as both companies continue to invest aggressively in artificial intelligence.

Microsoft also disclosed its long-term spending plans. The company announced that it would spread out long-term data centre lease contracts over a 25-year period rather than 15 years; this is an accounting change that reduces reported annual capital expenditure.

Microsoft stated that its actual spending plans remain unchanged and projected reported capital expenditure of $50 billion for the first quarter of fiscal year 2027 and $175 billion for the 2026 calendar year. Both figures came in below market expectations, and the figure for the 2026 calendar year was lower than Microsoft’s initial estimate of $190 billion.

Additionally, it was reported that the backlog for Microsoft’s cloud business rose to $678 billion, up from $627 billion in the previous quarter; the company noted that the entire quarter-over-quarter increase—approximately $50 billion—stemmed from commitments made by companies other than the major U.S. developers of artificial intelligence models.