As we continue to absorb the remarkable year-end financial results reported last week by Microsoft — and labeled by Cloud Wars founder Bob Evans as “the greatest of all time” — it’s important to drill into detail on the AI-specific results that were part of the quarterly and annual blowout.
The results demonstrate remarkable momentum with Copilots, agents, AI development tools, and adoption across horizontal and vertical applications. Collectively, they underscore the rapid industrywide progress and adoption of AI among consumers and enterprises spanning a wide range of industries.
“Copilot is actually driving real revenue now and is the fastest growing M365 product that’s ever been released. It’s no longer a potential, it’s actually happening, there’s traction with it, and that’s really exciting,” said Mason Whitaker, president of Microsoft partner Volt Technologies, whom I spoke with one day after the results were released.
Whitaker added in reference to customers’ AI work: “We’re definitely seeing a surge of demand from customers. It’s naturally becoming that next step in their expansion within the Microsoft platform, you know, if they have Business Standard or Business Premium, then they’re just starting to take advantage of those licenses.”
Copilot in Focus
So what’s got partners, customers, and market experts so impressed? Consider these Copilot results shared by CEO Satya Nadella in last week’s earnings call:
- Customer adoption rate for Copilot is faster than any Microsoft 365 suite ever
- Copilot has surpassed 100 million monthly active users, spanning commercial and consumer usage
- Big customers are adopting Copilot in force. Barclays will roll out Microsoft 365 Copilot to 100,000 employees globally. UBS is expanding its M365 Copilot deployment to all employees after an initial rollout to 55,000.
- Adobe, KPMG, Pfizer, and Wells Fargo purchased over 25,000 seats each in Q4
- Use of AI features across Microsoft products has now reached over 800 million monthly active users
- The company delivered the largest M365 Copilot update to date, incorporating chat, search, create, notebooks, and agents into a single platform.
Copilot is the flagship Microsoft AI platform and the centerpiece of its AI product lineup; the results above indicate broad adoptiona and licensing by enterprises supported by continued technology advances, all of which should lead to strong future financial performance.
Agents and Development Tools Focus
Nadella shared these updates on the company’s AI agents and development platforms:
- There’s been a surge in customers using Copilot Studio to build their own agents; customers created three million agents using Sharepoint and Copilot Studio in the fiscal year
- Foundry AI Agent Service is now being used by 14,000 customers to build AI agents. Nasdaq uses Foundry to build agents that help customers prepare for board meeting, cutting their prep time by 25%
- The number of tokens served by Foundry APIs were up over seven times year over year, to more than 500 trillion tokens processed, which Nadella said speaks to platform expansion beyond initial apps and services
- Tens of thousands of organizations have used the Researcher and Analyst deep reasoning agents in their first few weeks of availability
- Vertical industry agents are taking hold. Healthcare customers used Microsoft Dragon Copilot ambient AI to document over 13 million physician-patient encounters this quarter, up nearly 7X year-over-year. At Mercy Health System, more than 1,000 physicians are already using Copilot to reduce administrative burden so they can focus on providing better care and they health system plans to expand that usage to 5,000 providers. I’ll be discussing Microsoft healthcare AI and Copilots with another major customer, Community Health System, later this month.
- The company now has 20 million GitHub Copilot users. Among Fortune 100 companies, 90% now use GitHub Copilot. AI projects on GitHub more than doubled over the last year.
- The company’s Code Review agent is performing millions of code reviews each month.
Whitaker of Volt Technologies said demand is strong across the industries he serves, including manufacturing. One Volt Technologies customer built a bill-of-materials analysis agent that provides insights into costs, routes, and additional key data points. “We’re actually getting really good productivity gains out of these agents, just general efficiency,” he said.
As Microsoft’s overall results, and AI results specifically, indicate, there’s broad-based uptake and efficiency gains going on throughout its customer base and product portfolio, underscoring tangible and impressive AI momentum. From this perspective, momentum is so strong that it’s very likely outpacing the considerable hype surrounding AI, which is no small feat. The outlook for fiscal 2026 is bright indeed.
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