Revenue: As of FY2026, the actual value is USD 285.07 B, missing the estimate of USD 329.55 B.

EPS: As of FY2026, the actual value is USD 12.08, missing the estimate of USD 17.3547.

EBIT: As of FY2026, the actual value is USD 110.71 B.

Overall Summary Results (Fiscal Year 2026 vs. Fiscal Year 2025)

Revenue

Microsoft Corporation’s revenue increased by $50.1 billion, or 18%, to $331,839 million in fiscal year 2026, driven by growth in Microsoft Cloud, including a favorable foreign currency impact of 2%.

Gross Margin

Gross margin increased by $31.6 billion, or 16%, to $225,465 million. The gross margin percentage decreased slightly due to continued investments in AI infrastructure and growing AI product usage, partially offset by efficiency gains across the Microsoft Cloud.

Operating Income

Operating income increased by $26.7 billion, or 21%, to $155,237 million, primarily due to growth in Productivity and Business Processes and Intelligent Cloud, including a favorable foreign currency impact of 2%.

Net Income

Net income increased by 31% to $133,749 million.

Microsoft Cloud Revenue

Microsoft Cloud revenue increased 27% to $214.4 billion.

Commercial Remaining Performance Obligation

Commercial Remaining Performance Obligation increased 84% to $678 billion.

Microsoft Cloud Gross Margin Percentage

Microsoft Cloud Gross Margin Percentage decreased to 66% due to continued investments in AI infrastructure and growing AI product usage, partially offset by efficiency gains in Azure and Microsoft 365 Commercial cloud.

Operating Expenses

Operating expenses increased by $4.9 billion, or 7%, driven by investments in research and development compute capacity, AI talent, data to support product development, impairment and related expenses in the XBOX business, commercial sales investments, and higher Copilot advertising expenses.

Segment Results of Operations (Fiscal Year 2026 vs. Fiscal Year 2025)

Productivity and Business Processes

• Revenue: Increased $19.2 billion, or 16%, to $139,996 million.
  • Microsoft 365 Commercial products and cloud services revenue: Increased $14.2 billion, or 16%. Microsoft 365 Commercial cloud revenue grew 17% due to growth in revenue per user, driven by Microsoft 365 Copilot and Microsoft 365 E5, and Microsoft 365 Commercial seats grew 6%. Microsoft 365 Commercial products revenue grew 13%.
  • Microsoft 365 Consumer products and cloud services revenue: Increased $1.8 billion, or 24%. Microsoft 365 Consumer cloud revenue grew 28% with 7% subscriber growth.
  • LinkedIn revenue: Increased $2.0 billion, or 11%.
  • Dynamics products and cloud services revenue: Increased $1.2 billion, or 15%, driven by 18% growth in Dynamics 365.
• Cost of Revenue: Increased $2.6 billion, or 12%, to $25,017 million, due to investments in AI infrastructure for Microsoft 365 Copilot.
• Operating Expenses: Increased $2.5 billion, or 9%, to $31,100 million, due to investments in R&D compute capacity, AI talent, data, commercial sales, and Copilot advertising.
• Operating Income: Increased $14.1 billion, or 20%, to $83,879 million.

Intelligent Cloud

• Revenue: Increased $31.5 billion, or 30%, to $137,791 million.
  • Server products and cloud services revenue: Increased $31.0 billion, or 31%, driven by Azure and other cloud services, with Azure and other cloud services revenue growing 41%. Server products revenue increased 1%.
  • Enterprise and partner services revenue: Increased $500 million, or 6%, driven by growth in Enterprise Support Services.
• Cost of Revenue: Increased $17.7 billion, or 44%, to $57,876 million, due to investments in AI infrastructure.
• Operating Expenses: Increased $1.4 billion, or 7%, to $22,943 million, due to investments in R&D compute capacity, AI talent, and data.
• Operating Income: Increased $12.4 billion, or 28%, to $56,972 million.
• Gross Margin Percentage: Decreased due to continued investments in AI infrastructure and sales mix shift to Azure, partially offset by efficiency gains in Azure.

More Personal Computing

• Revenue: Decreased $597 million, or -1%, to $54,052 million.
  • Windows and Devices revenue: Decreased $230 million, or -1%. Windows OEM and Devices revenue decreased slightly due to a decline in Devices, partially offset by Windows OEM growth of 5%.
  • XBOX revenue: Decreased $1.7 billion, or -7%, due to declines in XBOX content and services and XBOX hardware. XBOX content and services revenue decreased 5%, and XBOX hardware revenue decreased 29%.
  • Search advertising revenue: Increased $1.3 billion, or 9%. Excluding traffic acquisition costs, Search advertising revenue increased 12%.
• Cost of Revenue: Decreased $1.8 billion, or -7%, to $23,481 million, due to lower hardware sales.
• Operating Expenses: Increased $940 million, or 6%, to $16,185 million, due to impairment and related expenses in the XBOX business and continued investments in R&D compute capacity, AI talent, and data.
• Operating Income: Increased $220 million, or 2%, to $14,386 million.
• Gross Margin Percentage: Increased due to sales mix shift to higher margin businesses.

Cash Flows (Fiscal Year 2026 vs. Fiscal Year 2025)

Net Cash from Operations

Net cash from operations increased $46.8 billion to $182,935 million, primarily due to increased cash received from customers and decreased cash used for income taxes, partially offset by increased cash paid to suppliers.

Net Cash Used in Financing

Net cash used in financing increased $847 million to - $52,546 million, primarily due to a $6.0 billion decrease in cash used for debt repayments, offset by a $3.9 billion increase in common stock repurchases and a $2.4 billion increase in dividends paid.

Net Cash Used in Investing

Net cash used in investing increased $66.9 billion to - $139,500 million, primarily due to a $51.4 billion increase in additions to property and equipment and a $22.2 billion increase in cash used in other investing activities, partially offset by a $4.2 billion decrease in cash used in company acquisitions and a $2.4 billion decrease in net investment purchases, sales, and maturities.

Unique Metrics

Microsoft Corporation’s investment in OpenAI

Fiscal year 2026 included $6.5 billion of net gains from investments in OpenAI, primarily from the dilution gain related to the OpenAI Recapitalization, compared to fiscal year 2025 which included - $4.8 billion of net losses from these investments.

Revenue and Accounts Receivable from OpenAI

For fiscal year 2026, Microsoft Corporation recorded revenue from commercial arrangements with OpenAI, including revenue-sharing payments, of $24.1 billion, and accounts receivable from OpenAI was $6.0 billion as of June 30, 2026.

Outlook/Guidance Summary

Microsoft Corporation plans to continue significant investments in product research and development, particularly in AI-based products and services, coordinating across operating segments and leveraging results company-wide. The company expects to continue investing in capital expenditures to support growth in cloud offerings and AI training and infrastructure, anticipating these investments will increase operating costs and may decrease operating margins. Microsoft Corporation intends to continue returning capital to shareholders through dividends and will invest in sales, marketing, product support infrastructure, and acquisitions aligned with its business strategy.