“Capital expenditure growth, as we shared last quarter, will moderate compared to FY '25 with a greater mix of short-lived assets.”

In context

“outlook. My commentary for both the full year and next quarter is on a U.S. dollar basis, unless specifically noted otherwise. Let me start with some full year commentary for FY '26. First, FX. Assuming current rates remain stable, we expect FX to increase full year revenue growth and COGS growth by approximately 2 points and to increase operating expense growth by 1 point. Next, building on the strong momentum we saw this past year, we expect to deliver another year of double-digit revenue and operating income growth in FY '26. We will continue to invest against the expansive opportunity ahead across both capital expenditures and operating expenses given our leadership position in commercial cloud, strong demand signals for our cloud and AI offerings, and significant contracted backlog. Capital expenditure growth, as we shared last quarter, will moderate compared to FY '25 with a greater mix of short-lived assets. Due to the timing of delivery of additional capacity in H1, including large finance lease sites, we expect growth rates in H1 will be higher than in H2. We remain focused on delivering revenue growth and increasing our operational agility. And as a result, we expect operating margins to be relatively unchanged year-over-year. And finally, we expect our FY '26 effective tax rate to be between 19% and 20%. Now to our outlook for the first quarter. Based on current rates, we expect FX to increase total revenue growth by 2 points. Within the segments, we expect FX to increase revenue growth by roughly 3 points in Productivity and Business Processes and roughly 1 point in Intelligent Cloud and More Personal Computing. We expect FX to increase COGS and operating expense growth by roughly 1 poin”