Microsoft reported its third quarter 2026 earnings and it showed that its search and advertising revenue was up for 12% and that means its ad growth is growing again. The previous quarter it was up 10% before that, up 16% and the one before that was 21% and this quarter, it is only up 10%.
Bing also hit a huge milestone, 1 billion monthly active users - the company announced last night.
Microsoft wrote, "Search advertising revenue excluding traffic acquisition costs increased 12% (up 9% in constant currency)."
Microsoft reports Q3 revenue up 18% YoY to $82.9 billion, operating income up 20% to $38.4B, and net income up 20% to $31.8.
Here is the chart I make showing just the ad dollar change from quarter to quarter, so you can see just that:
Here are the highlights from the earnings release:
- Revenue was $82.9 billion and increased 18% (up 15% in constant currency)
- Operating income was $38.4 billion and increased 20% (up 16% in constant currency)
- Net income was $31.8 billion and increased 23% on a GAAP basis, and increased 20% (up 18% in constant currency) on a non-GAAP basis
- Diluted earnings per share was $4.27 and increased 23% on a GAAP basis, and increased 21% (up 18% in constant currency) on a non-GAAP basis
- Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below
Microsoft beat on the top and bottom line but the company is losing some top leaders, with two senior execs announcing plans to retire during the quarter.
Satya Nadella, Microsoft's CEO, said:
“We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era," said Satya Nadella, chairman and chief executive officer of Microsoft. “Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.”
“Bing monthly active users reached 1B” which is weird, bEcAuSe NoBoDy UsEs BiNg https://t.co/bZxJUl4oIs
— Michael Schechter (@mikeschechter) April 29, 2026
What an amazing milestone! Bing just hit 1B MAU. So proud to be part of this team! #Bing #MAI #Microsoft #search https://t.co/Q9lnr4BoeX
— Krishna Madhavan (@kmadhavan77) April 29, 2026
Bing hitting 1 billion monthly active users is HUGE. More growth in 5 years than the prior 10. #SEOs pay close attention. The search landscape is shifting fast. Time to optimize for Bing Search and Bing Grounding API alongside Google. Congrats to the entire Bing team and partners… https://t.co/beSO2HObSg
— Fabrice Canel (@facan) April 30, 2026
Forum discussion at X.
