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Microsoft (MSFT) FY2026 results: revenue $331.8 billion, up 17.8% on the year

Microsoft Corp. (MSFT) reported revenue of $331.8 billion for fiscal 2026, the year ended 30 June 2026, up 17.8% on the year before. Net income was $133.7 billion, up 31.3%, and diluted earnings per share $17.95. The figures are the company's own, from the 10-K it filed with the SEC on 29 July 2026.

Revenue
$331.8 billion
+17.8% on the year
FY2019FY2026
Operating margin
46.8%
45.6% a year earlier
FY2019FY2026
Net income
$133.7 billion
+31.3% on the year
FY2019FY2026
Diluted EPS
$17.95
+31.6% on the year
FY2019FY2026

this yearthe year beforeHover a bar for its figure.

The year in brief

What management said about the year

  • Revenue and operating income rose 18%: Revenue was $90.0 billion, up 18% (17% in constant currency). Operating income was $40.6 billion, up 18%. Net income was $35.8 billion GAAP and $35.3 billion non-GAAP.
  • Diluted EPS on GAAP and adjusted bases: Diluted EPS was $4.81 GAAP, up 32%, and $4.74 non-GAAP, up 23%. Non-GAAP results exclude the impact from investments in OpenAI.
  • Discrete items added $0.27 to EPS: Compared with guidance given on April 29, 2026, several discrete items produced a benefit of $0.27 on diluted EPS.
  • Intelligent Cloud revenue up 32%: Intelligent Cloud revenue was $39.3 billion, versus $29.9 billion a year earlier. Segment operating income was $16.0 billion versus $12.1 billion.
  • Azure growth rose to 43%: Azure and other cloud services revenue grew 43%, compared with 40% growth in the March quarter. The company said Azure revenue surpassed $100 billion for the first time this year.
Read the Q4 FY2026 earnings call summary

From this 10-K

Microsoft, founded in 1975, makes and supports software, services, devices and solutions for individuals and businesses. Its products include operating systems, server applications, business applications, software development tools, desktop and server management tools and video games, and it designs and sells the hardware some of them run on. It also sells cloud services, support and consulting, and online advertising. It reports in three segments.

Microsoft Corp., the 10-K for 2026

Microsoft, founded in 1975, makes and supports software, services, devices and solutions for individuals and businesses. Its products include operating systems, server applications, business applications, software development tools, desktop and server management tools and video games, and it designs and sells the hardware some of them run on. It also sells cloud services, support and consulting, and online advertising. It reports in three segments.

Productivity and Business Processes

The productivity, communication and information services, across devices and platforms. Microsoft 365 Commercial comes first: the cloud side covers Microsoft 365 Commercial, Enterprise Mobility + Security, the cloud portion of Windows Commercial, the per-user portion of Power BI, Exchange, SharePoint, Teams, Microsoft 365 Security and Compliance, and Microsoft 365 Copilot, while the products side is Windows Commercial and Office licensed to run on a customer's own machines. Microsoft 365 Consumer sits beside it as subscriptions, on-premises Office and other consumer services, and the filing notes that the consumer cloud side also turns on demand for consumer email and OneDrive.

LinkedIn is in this segment too, with paid lines beyond the free service: Talent Solutions, Marketing Solutions, Premium Subscriptions and Sales Solutions. So is Dynamics, which sells financial management, enterprise resource planning, customer relationship management and supply chain software to small and medium businesses, large organisations and divisions of global companies, both as the Dynamics 365 cloud applications and as software installed on site.

Intelligent Cloud

The server products and cloud services, public, private and hybrid. Azure is a set of cloud services customers reach through a global network of datacentres, covering computing, networking, storage, mobile and web application services, AI and Internet of Things. The company sells supercomputing capacity for AI workloads alongside AI cloud services and hardware, including silicon it has built itself and arrangements with chip manufacturers, and Azure AI Foundry as the platform developers use to build and manage AI applications and agents.

Around Azure sit the server products a customer runs on its own hardware, SQL Server, Windows Server, Visual Studio, System Center and the client access licences that go with them. GitHub is here, sold both as a cloud service and on-premises, as a place for developers to manage code. So are the Health and Life Sciences cloud services. The segment also holds Enterprise Support Services, Industry Solutions, the Microsoft Partner Network and the training arm, which help customers build, deploy and run Microsoft software and certify people to work with it.

More Personal Computing

Three things. Windows and Devices covers Windows licensed to the manufacturers who pre-install it on the machines they sell, plus Surface and PC accessories that Microsoft designs and sells itself. The filing sets out what moves that licensing line: how many computing devices the market buys, the mix by form factor and screen size, the split between developed and growth markets, how much of the AI PC category takes hold, inventory levels in the manufacturer channel, component supply constraints, and piracy.

XBOX covers the consoles, the games, the in-game content, XBOX Game Pass and other subscriptions, XBOX Cloud Gaming, advertising and other cloud services. Content comes from a group of first-party studios as well as third parties. Search advertising is the third piece: Bing, Copilot, Microsoft News, Microsoft Edge and third-party affiliates.

The people and the plant

As of 30 June 2026 Microsoft employed about 223,000 people full-time: 121,000 in the United States and 102,000 elsewhere. Of those, 89,000 were in operations. It runs one global operations service centre covering the Americas, Asia Pacific, Europe and the Middle East, which handles contracts and order processing, billing, credit, vendor management and logistics, and it runs datacentres across each of those regions. The company says it is aligning datacentre locations and server capacity to the demand it sees for AI services, and that those datacentres depend on permitted and buildable land, predictable energy, networking supplies and servers, graphics processing units among them.

From Microsoft's annual report on Form 10-K for the year ended 30 June 2026. The filing

Written from the 10-K filed 29 July 2026: read the full 10-K.

The four quarters: Q1 FY2026 · Q2 FY2026 · Q3 FY2026 · Q4 FY2026

Income statement (profit and loss)

$ millionFY2026FY2025FY2024On the yearLast 8 years
Revenue331,839281,724245,122+17.8%
Cost of revenue106,37487,83174,114+21.1%
Gross profit225,465193,893171,008+16.3%
Gross margin67.9%68.8%69.8%
Research and development35,56232,48829,510+9.5%
Operating income155,237128,528109,433+20.8%
Operating margin46.8%45.6%44.6%
Interest expense3,0512,3852,935+27.9%
Pre-tax income165,934123,627107,787+34.2%
Income tax32,18521,79519,651+47.7%
Effective tax rate19.4%17.6%18.2%
Net income133,749101,83288,136+31.3%
Net margin40.3%36.1%36.0%
Diluted EPS$17.95$13.64$11.80+31.6%
$ million except per share.
Read moreFree 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

$ millionFY2026FY2025FY2024On the yearLast 8 years
Operating cash flow182,935136,162118,548+34.4%
Capital expenditure115,94864,55144,477+79.6%
Free cash flow66,98771,61174,071-6.5%
Free cash flow margin20.2%25.4%30.2%
Cash from investing-139,500-72,599-96,970
Cash from financing-52,546-51,699-37,757
Depreciation and amortisation39,00028,00020,000+39.3%
Share-based compensation12,40511,97410,734+3.6%
Buybacks22,27118,42017,254+20.9%
Dividends paid26,44524,08221,771+9.8%
Dividend per share$3.64$3.32$3.00+9.6%
Diluted shares, weighted7,453m7,465m7,469m-0.2%
Shares outstanding at period end7,427m7,434m7,434m-0.1%

Balance sheet

$ millionFY2026FY2025FY2024On the yearLast 8 years
Shareholders' equity442,387343,479268,477+28.8%
Debt40,29443,15151,630-6.6%
Operating lease liabilities16,53217,43715,497-5.2%
Other liabilities259,163214,936176,559+20.6%
Total liabilities and equity758,376619,003512,163+22.5%
Fixed assets313,076204,966135,591+52.7%
Goodwill119,651119,509119,220+0.1%
Intangible assets18,60922,60427,597-17.7%
Investments92,25679,72871,828+15.7%
Cash and equivalents20,93530,24218,315-30.8%
Receivables80,87669,90556,924+15.7%
Inventory1,3979381,246+48.9%
Other assets111,57691,11181,442+22.5%
Total assets758,376619,003512,163+22.5%

10-K for the year ended 30 June 2026, filed 29 July 2026: the filing.