Microsoft (MSFT) Q2 FY2026 earnings: revenue $81.3 billion, up 16.7% on the year

Microsoft Corp. (MSFT) reported revenue of $81.3 billion for Q2 FY2026, the quarter ended 31 December 2025, up 16.7% on the same quarter a year earlier. Net income was $38.5 billion, up 59.5% on the year, and diluted earnings per share $5.16. The figures are the company's own, from the 10-Q it filed with the SEC on 28 January 2026.

Revenue

$81.3 billion

+16.7% on the year · +4.6% on the quarter

Q3 FY2024Q2 FY2026

Operating margin

47.1%

45.5% a year earlier

Q3 FY2024Q2 FY2026

Net income

$38.5 billion

+59.5% on the year · +38.6% on the quarter

Q3 FY2024Q2 FY2026

Diluted EPS

$5.16

+59.8% on the year · +38.7% on the quarter

Q3 FY2024Q2 FY2026

this quarterthe same quarter a year earlierHover a bar for its figure.

What management said

Revenue and operating income rose: Revenue reached $81.3 billion, up 17%, and operating income reached $38.3 billion, up 21%. Constant-currency growth was 15% and 19% respectively.
Intelligent Cloud grew fastest: Intelligent Cloud revenue was $32.9 billion, up 29% (28% constant currency). Its operating income was $13.9 billion, against $10.9 billion a year earlier.
Azure and cloud services grew 39%: Azure and other cloud services revenue rose 39%, or 38% in constant currency, within the Intelligent Cloud segment.

Read the earnings call summary

Income statement (profit and loss)

$ million	Q2 FY2026	Q1 FY2026	Q2 FY2025	On the quarter	On the year
Revenue	81,273	77,673	69,632	+4.6%	+16.7%
Cost of revenue	25,978	24,043	21,799	+8.0%	+19.2%
Gross profit	55,295	53,630	47,833	+3.1%	+15.6%
Gross margin	68.0%	69.0%	68.7%
Research and development	8,504	8,146	7,917	+4.4%	+7.4%
Operating income	38,275	37,961	31,653	+0.8%	+20.9%
Operating margin	47.1%	48.9%	45.5%
Interest expense	736	698	594	+5.4%	+23.9%
Pre-tax income	48,246	34,301	29,365	+40.7%	+64.3%
Income tax	9,788	6,554	5,257	+49.3%	+86.2%
Effective tax rate	20.3%	19.1%	17.9%
Net income	38,458	27,747	24,108	+38.6%	+59.5%
Net margin	47.3%	35.7%	34.6%
Diluted EPS	$5.16	$3.72	$3.23	+38.7%	+59.8%

$ million except per share.

Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Those four are arithmetic on the filed numbers; everything else is as filed. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and share counts are as they are.

Cash flow

$ million	Q2 FY2026	Q1 FY2026	Q2 FY2025	On the quarter	On the year
Operating cash flow	35,758	45,057	22,291	-20.6%	+60.4%
Capital expenditure	29,876	19,394	15,804	+54.0%	+89.0%
Free cash flow	5,882	25,663	6,487	-77.1%	-9.3%
Free cash flow margin	7.2%	33.0%	9.3%
Cash from investing	-22,705	-34,559	-14,112
Cash from financing	-17,617	-11,799	-11,243
Depreciation and amortisation	9,100	8,600	6,700	+5.8%	+35.8%
Share-based compensation	3,219	2,983	3,089	+7.9%	+4.2%
Buybacks	7,415	5,650	4,986	+31.2%	+48.7%
Dividends paid	6,762	6,169	6,170	+9.6%	+9.6%
Dividend per share	$0.91	$0.91	$0.83	0.0%	+9.6%
Diluted shares, weighted	7,460m	7,466m	7,468m	-0.1%	-0.1%
Shares outstanding at period end	7,429m	7,434m	7,435m	-0.1%	-0.1%

Cash flow lines for the quarter; where the company files them year to date, the quarter is the difference between two filings.

Balance sheet

$ million	Q2 FY2026	Q1 FY2026	Q2 FY2025	On the quarter	On the year
Shareholders' equity	390,875	363,076	302,695	+7.7%	+29.1%
Debt	40,262	43,208	44,970	-6.8%	-10.5%
Operating lease liabilities	17,345	17,348	17,254	-0.0%	+0.5%
Other liabilities	216,820	212,719	168,979	+1.9%	+28.3%
Total liabilities and equity	665,302	636,351	533,898	+4.5%	+24.6%
Fixed assets	261,126	230,861	166,902	+13.1%	+56.5%
Goodwill	119,622	119,497	119,191	+0.1%	+0.4%
Intangible assets	20,289	21,236	25,385	-4.5%	-20.1%
Investments	86,368	84,628	69,654	+2.1%	+24.0%
Cash and equivalents	24,296	28,849	17,482	-15.8%	+39.0%
Receivables	56,535	52,894	48,188	+6.9%	+17.3%
Inventory	1,059	1,130	909	-6.3%	+16.5%
Other assets	96,007	97,256	86,187	-1.3%	+11.4%
Total assets	665,302	636,351	533,898	+4.5%	+24.6%

Questions

What was Microsoft's revenue in Q2 FY2026?

Microsoft (MSFT) reported revenue of $81.3 billion for Q2 FY2026, the quarter ended 31 December 2025, up 16.7% on the same quarter a year earlier.

How much did Microsoft earn in Q2 FY2026?

Net income for Q2 FY2026 was $38.5 billion, up 59.5% on the year, and diluted earnings per share $5.16.

When did Microsoft report Q2 FY2026 results?

Microsoft filed its 10-Q for the quarter ended 31 December 2025 with the SEC on 28 January 2026.

Quarterly results, the last 20 quarters

	Q2 FY2022	Q3 FY2022	Q4 FY2022 *	Q1 FY2023	Q2 FY2023	Q3 FY2023	Q4 FY2023 *	Q1 FY2024	Q2 FY2024	Q3 FY2024	Q4 FY2024 *	Q1 FY2025	Q2 FY2025	Q3 FY2025	Q4 FY2025 *	Q1 FY2026	Q2 FY2026	Q3 FY2026	Q4 FY2026 *	Q1 FY2027
Revenue	51,728	49,360	51,865	50,122	52,747	52,857	56,189	56,517	62,020	61,858	64,727	65,585	69,632	70,066	76,441	77,673	81,273	82,886	90,007	92,279
Cost of revenue	16,960	15,615	16,429	15,452	17,488	16,128	16,795	16,302	19,623	18,505	19,684	20,099	21,799	21,919	24,014	24,043	25,978	26,828	29,525	29,720
Gross profit	34,768	33,745	35,436	34,670	35,259	36,729	39,394	40,215	42,397	43,353	45,043	45,486	47,833	48,147	52,427	53,630	55,295	56,058	60,482	62,559
Gross margin	67%	68%	68%	69%	67%	69%	70%	71%	68%	70%	70%	69%	69%	69%	69%	69%	68%	68%	67%	68%
R&D	5,758	6,306	6,849	6,628	6,844	6,984	6,739	6,659	7,142	7,653	8,056	7,544	7,917	8,198	8,829	8,146	8,504	8,915	9,997	9,047
Operating income	22,247	20,364	20,534	21,518	20,399	22,352	24,254	26,895	27,032	27,581	27,925	30,552	31,653	32,000	34,323	37,961	38,275	38,398	40,603	45,915
Operating margin	43%	41%	40%	43%	39%	42%	43%	48%	44%	45%	43%	47%	45%	46%	45%	49%	47%	46%	45%	50%
Interest expense	525	503	496	500	490	496	482	525	909	800	701	582	594	594	615	698	736	778	839	870
Pre-tax income	22,515	20,190	20,487	21,572	20,339	22,673	24,727	27,284	26,526	26,727	27,250	30,269	29,365	31,377	32,616	34,301	48,246	39,340	44,047	45,953
Tax rate	17%	17%	18%	19%	19%	19%	19%	18%	18%	18%	19%	19%	18%	18%	17%	19%	20%	19%	19%	20%
Net income	18,765	16,728	16,740	17,556	16,425	18,299	20,081	22,291	21,870	21,939	22,036	24,667	24,108	25,824	27,233	27,747	38,458	31,778	35,766	36,629
Net margin	36%	34%	32%	35%	31%	35%	36%	39%	35%	35%	34%	38%	35%	37%	36%	36%	47%	38%	40%	40%
Diluted EPS	$2.48	$2.22	$2.24	$2.35	$2.20	$2.45	$2.69	$2.99	$2.93	$2.94	$2.95	$3.30	$3.23	$3.46	$3.65	$3.72	$5.16	$4.27	$4.81	$4.92
Operating cash flow	14,480	25,386	24,629	23,198	11,173	24,441	28,770	30,583	18,853	31,917	37,195	34,180	22,291	37,044	42,647	45,057	35,758	46,679	55,441	58,000
Capital expenditure	5,865	5,340	6,871	6,283	6,274	6,607	8,943	9,917	9,735	10,952	13,873	14,923	15,804	16,745	17,079	19,394	29,876	30,876	35,802	39,367
Free cash flow	8,615	20,046	17,758	16,915	4,899	17,834	19,827	20,666	9,118	20,965	23,322	19,257	6,487	20,299	25,568	25,663	5,882	15,803	19,639	18,633
Buybacks	7,433	8,822	8,757	5,573	5,459	5,509	5,704	4,831	4,000	4,213	4,210	4,107	4,986	4,781	4,546	5,650	7,415	4,627	4,579	4,379
Dividends paid	4,652	4,645	4,632	4,621	5,066	5,059	5,054	5,051	5,574	5,572	5,574	5,574	6,170	6,169	6,169	6,169	6,762	6,756	6,758	6,757
Shares outstanding	7,500m	7,483m	7,464m	7,457m	7,447m	7,437m	7,432m	7,431m	7,432m	7,433m	7,434m	7,436m	7,435m	7,434m	7,434m	7,434m	7,429m	7,429m	7,427m	7,427m
Filing	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q	10-Q	10-Q	10-K	10-Q

Each quarter as filed, linked to its filing.

* The fourth quarter is the full year less the first three quarters, because the company files the year and not the quarter on its own. A fourth quarter's EPS, and its diluted share count where shown, are from the company's results press release for that quarter, checked against the company's filed figures or a second data source. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and the share count are as they are. Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Cash flow lines filed year to date are the difference between two filings. Shares outstanding are at the period end where the balance sheet tags them, otherwise the count on the filing's cover page. A derived fourth-quarter EPS is left blank when a split in the year makes the arithmetic meaningless.

10-Q for the period ended 31 December 2025, filed 28 January 2026: the filing.