TLDR
- Microsoft stock rises 0.64% as its quarterly dividend reaches $0.91 per share
- Microsoft’s annual capital spending jumps nearly 80% to $115.95 billion
- Azure revenue tops $100 billion as Microsoft expands cloud infrastructure
- Microsoft free cash flow falls 6.46% despite a 31.34% rise in net income
- Microsoft expects capital spending to stay elevated through fiscal 2027
Microsoft (MSFT) stock gained on Friday as shareholders received a higher dividend while the company accelerated spending on cloud infrastructure. MSFT rose 0.64% to $484.25, adding $3.10 during active trading. The move followed Microsoft’s August 20 ex-dividend date for its latest quarterly payment.
Microsoft Dividend Rises as Capital Spending Accelerates
Microsoft set its quarterly dividend at $0.91 per share, compared with $0.83 one year earlier. The payment reflects another increase in shareholder distributions despite a sharp rise in infrastructure investment. At $481.15, the annualized dividend yield remained below 1%.
Microsoft spent $115.948 billion on capital expenditures during the fiscal year ended June 30. That figure increased 79.62% as the company expanded cloud computing and artificial intelligence infrastructure. By comparison, fiscal 2025 capital expenditures totaled $64.551 billion.
Microsoft distributed $26.445 billion through dividends during the latest fiscal year. The company also spent $22.271 billion repurchasing its own shares during the period. Capital expenditure growth significantly outpaced the increase in shareholder payouts.
Free Cash Flow Falls Despite Higher Microsoft Earnings
Microsoft reported $133.749 billion in annual net income, representing a 31.34% increase. However, free cash flow declined 6.46% to $66.987 billion during the same period. Higher infrastructure spending contributed to the widening difference between earnings and available cash.
Fiscal fourth-quarter spending showed the scale of Microsoft’s current expansion program. Quarterly capital expenditures reached $35.802 billion, representing an increase of 109.63%. At the same time, quarterly free cash flow dropped 23.19% to $19.639 billion.
Microsoft recorded substantial growth across several major business segments during the fiscal year. Azure annual revenue surpassed $100 billion after increasing 41% from the previous period. Microsoft 365 Copilot also exceeded 30 million paid seats across business customers.
Azure Growth Supports Microsoft’s Infrastructure Expansion
Microsoft reported commercial remaining performance obligations of $678 billion, an increase of 84%. The figure represents contracted revenue that Microsoft expects to recognize through future services. This backlog provides context for the company’s continued expansion of data center capacity.
Microsoft expects capital expenditures to remain elevated during fiscal 2027 because demand continues across its product portfolio. Management also expects the company to maintain positive free cash flow during the period. Calendar 2026 spending could reach approximately $175 billion after accounting adjustments.
Microsoft historically announces its annual dividend increase during September, creating another important shareholder milestone. The company announced its previous increase on September 15, 2025, raising the quarterly dividend to $0.91. The next declaration will follow a year of record infrastructure spending and higher cloud revenue.
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