Microsoft spent nearly $116 billion on capital expenditures during the fiscal year ending June 30. This figure represents a 79.6% increase compared to the previous year. The company allocated these funds to expand cloud and AI infrastructure for Azure AI and Copilot.
This aggressive spending led to a 6.46% decrease in annual free cash flow. Despite the cash flow dip, Microsoft reported growth in net income.
The commercial backlog surged 84% over the fiscal year. This backlog now totals $678 billion, signaling high demand for new AI capabilities.