Microsoft’s Q2 2026 earnings call emphasized the growing importance of AI and cloud for CX leaders.
The company delivered 17% revenue growth, 26% Microsoft Cloud growth, and passed $51.5 billion in quarterly cloud revenue, powered by AI demand and Azure momentum.
At the same time, it warned of margin pressure and a cloud that remains supply constrained as it races to deploy more AI infrastructure.
During the earnings call, CEO Satya Nadella was explicit about the scale of that shift.
“We are in the beginning phases of AI diffusion and its broad GDP impact… Even in this early innings, we have built an AI business that is larger than some of our biggest franchises that took decades to build.”
That framing matters. It signals that copilots, agents, and AI‑driven platforms are not short‑term experiments. They are now central to Microsoft’s long‑term growth story and, by extension, to the roadmaps of customers that build CX and contact center strategies on its stack.
Satya has previously been very transparent about his position on AI, describing it as an “existential threat“.
Copilot And Agents: From Hype To Habits
Spending time with CX leaders right now, there is a common tension. Many have piloted copilots, few have scaled them. Microsoft’s Q2 numbers show how quickly that is changing across its base.
Microsoft 365 Copilot now has around 15 million paid seats, with seat additions up more than 160 percent year over year. Daily active usage is up tenfold, and the number of customers deploying more than 35,000 seats has tripled.
Nadella stressed a deeper shift.
“You can think of agents as the new apps,” he said. “All software is being rewritten.”
Underneath that line is a clear CX signal. Microsoft is positioning copilots and AI agents as standard companions across work, from email and documents to security operations and software development. The same approach will extend into service and contact center workflows.
Three themes stand out for CX leaders:
First, agent assist and knowledge. Copilot can now reason across Microsoft 365 content in near real time. That can reduce handle times, improve consistency, and remove friction in complex support cases.
Second, cross‑team coordination. Nadella highlighted WorkIQ, a stateful agent that understands people, roles, projects, and communications. That kind of context can support better routing, escalation, and follow‑up across service, sales, and back‑office teams.
Third, domain‑specific agents. GitHub Copilot and security copilots show how Microsoft builds specialised assistants for particular workflows. CX‑specific agents, grounded in contact data and customer history, are a logical next step.
Fabric, Foundry, And The CX Data Advantage
Behind the visible copilots sits a data and AI platform that will shape how far enterprises can go with customer experience automation.
Microsoft reported that Fabric, its end‑to‑end analytics platform, now has more than 31,000 customers and a revenue run rate above $2 billion, with 60 percent growth year over year. Foundry, its agent and model platform, has more than 1,500 customers, and over 250 of those are on track to process more than a trillion tokens this year.
Nadella framed Foundry as a complete agent stack, covering models, tuning, orchestration, safety, and observability. He also called out the “tacit knowledge” that lives inside fine‑tuned models as a new form of enterprise IP.
“This is probably the most important sovereign consideration,” he said, referring to how firms protect their value while using AI at scale.
For CX organizations, this combination matters in practice:
CX teams can use Fabric to bring together customer, interaction, and operational data. They can then use Foundry and tools like Copilot Studio to build agents that sit in front of that data with controls from Agent 365.
Done well, that can move CX from simple bots to agents that understand full journeys and policies. Done badly, it can create fragmented experiences and governance risk. The technology is ready. The operating model still needs careful design.
Big AI CapEx, Tight Margins, And CX Budgets
One of the most watched parts of the call focused on cost. Microsoft’s capital expenditure reached $37.5 billion in the quarter, with the majority spent on AI‑ready compute and data centers.
Cloud gross margins dipped as a result, and management guided that Microsoft Cloud gross margin would sit around 65 percent in the near term as AI investments continue.
CFO Amy Hood was clear that capacity is being allocated to copilots and AI services first, then to Azure more broadly. Many GPU contracts are already sold for the full useful life of the hardware.
That is good news if you are betting on Microsoft’s AI roadmap. It also means CX leaders need to keep linking AI projects to hard outcomes. With infrastructure costs rising behind the scenes, unproven AI features will be harder to justify.
Headline Numbers From Q2 2026
Microsoft’s latest quarter underlines how quickly AI and cloud are scaling.
- Total revenue: $81.3 billion, up 17 percent in constant currency.
- Earnings per share: $4.14, up 24 percent in constant currency.
- Microsoft Cloud revenue: $51.5 billion, up 26 percent in constant currency.
- Intelligent Cloud revenue: $32.9 billion, up 29 percent in constant currency.
- Azure and other cloud services: up 39 percent in constant currency.
On the commercial side, bookings grew 23 percent and the commercial remaining performance obligation reached $625 billion, with strong growth in non‑OpenAI commitments.
These numbers are evidence of recent reports on Microsoft’s acquisitions and investments.
For CX buyers, that scale matters. It signals that AI‑driven services, from copilots to analytics and agents, sit on top of a very large and fast‑growing cloud foundation.
How CX Leaders Should Respond
Three practical steps stand out.
First, align AI to specific CX outcomes, not generic innovation. Tie copilots and agents to measurable changes in resolution times, CSAT, NPS, or revenue.
Second, treat data and governance as CX assets, not just IT concerns. The value of agents depends on the quality, coverage, and control of the data they see.
Third, plan for skills and change, not just licenses. The most successful CX teams will pair AI adoption with new coaching, new playbooks, and new measures of performance.
Insight is easy. Execution is the differentiator. Microsoft’s Q2 2026 earnings show that AI and cloud will keep moving with or without you. The real question is whether your CX organization is prepared to turn this platform into better experiences, not just bigger bills.
Join the conversation: Join our LinkedIn community (40,000+ members): https://www.linkedin.com/groups/1951190/
Get the weekly rundown: Subscribe to our newsletter: http://cxtoday.com/sign-up
