Microsoft’s search advertising revenue, excluding traffic acquisition costs, grew 10 percent year over year in the fiscal fourth quarter, the company said in its FY2026 earnings release Wednesday. Growth was 9 percent in constant currency. The result matches the pace Microsoft reported in two earlier quarters this fiscal year, but it trails the 12 percent growth posted the prior quarter, and it caps a run of deceleration that search advertising has not escaped since early in the fiscal year.
The single quarter is not the real story. Ex-TAC search ad revenue growth has moved from 21 percent, to 16 percent, to 10 percent, to 12 percent, to 10 percent across Microsoft’s last five reported quarters, according to figures Search Engine Roundtable compiled from the company’s own disclosures. That sequence shows deceleration in four of the five periods. A trend spanning five quarters is harder to dismiss as noise than any single earnings beat.
Search sits inside Microsoft’s More Personal Computing segment, which fell 4 percent overall for the quarter. Windows OEM revenue dropped 7 percent, and Xbox revenue dropped 10 percent. Search advertising was the only growth line in the segment. Without it, the segment’s overall decline would have been steeper.
Microsoft has spent close to two years arguing that Copilot and AI-generated answers would help Bing take search share from Google. A fourth-quarter deceleration in the metric closest to that claim, ex-TAC search ad revenue, does not support it. Whatever Microsoft’s AI products are doing for the company, it is not yet arriving as faster search advertising growth.
That comparison needs a caveat. Revenue growth is not query share, and Microsoft does not disclose Bing query volume. This release confirms the dollars grew more slowly, not whether actual search usage shifted at all. Currency also matters: the one-point gap between the 10 percent reported figure and the 9 percent constant-currency figure means part of even this quarter’s growth came from exchange rates, not demand.
Microsoft’s other numbers came in strong and pulled attention away from search. Total company revenue reached $90.0 billion, up 18 percent, and net income rose 31 percent to $35.8 billion on a GAAP basis. CEO Satya Nadella said Azure “surpassed $100 billion for the first time” this year and that Microsoft 365 Copilot “reached over 30 million paid seats.” Neither figure describes search, and the after-hours stock move that followed the release tracked those numbers, not the ad line.
Search teams benchmarking Bing’s competitive position should track the constant-currency growth rate each quarter, not just the headline figure, and treat any single-quarter acceleration as provisional until it holds for two consecutive periods. Four decelerating quarters out of five is a pattern that outlasts one good quarter’s framing.
Barry Schwartz reported the figures for Search Engine Roundtable on July 29, 2026, citing Microsoft’s FY2026 fourth-quarter earnings release.
