“For calendar year 2026, we expect the mix of short-lived assets to remain similar to Q3.”

In context

“inclusive of these one-time costs, we expect full-year FY '26 operating margins to be up about one point year over year. Excluding any impact from our investments in OpenAI, other income and expense is expected to be roughly negative $100 million as interest income will be more than offset by interest expense, which includes the interest payments related to data center finance leases. We expect our adjusted Q4 effective tax rate to be approximately 19%. Next, capital expenditures. We expect CapEx spend to increase to over $40 billion as we continue to bring more capacity online. The sequential increase includes roughly $5 billion from higher component pricing as well as the impact from finance leases, which add variability given full value is recorded in the period of lease commencement. For calendar year 2026, we expect the mix of short-lived assets to remain similar to Q3. We expect to invest roughly $190 billion in capital expenditures, which includes approximately $25 billion from the impact of higher component pricing. We remain confident in the return on these investments given higher demand signals and increasing product usage, as well as the efficiencies we are already driving across the platform. Even with these additional investments and continued efforts to bring GPU, CPU, and storage capacity online faster, we expect to remain constrained at least through 2026. Despite these constraints, and the continued need to balance incoming supply, we expect Azure growth to show modest acceleration in the second half of the calendar year, compared with the first half. Now I would like to share some closing thoughts as we look to next fiscal year. First, we c”