Microsoft Corporation (MSFT) Income Statement

30Y historyFree accessUpdated daily

Revenue growth accelerated to 17.7% in 2026Q4 with operating margin expanding to 45.1%, though gross margin declined to 67.2% from 70.1% in 2024Q3 due to AI mix dilution.

Annual statement

MSFT Income Statement

Microsoft Corporation (MSFT) annual income statement — 30-year revenue, gross profit & net income history

Annual Quarterly

Metric	Jun'26	Jun'25	Jun'24	Jun'23	Jun'22	Jun'21	Jun'20	Jun'19	Jun'18	Jun'17	Jun'16	Jun'15	Jun'14	Jun'13	Jun'12	Jun'11	Jun'10	Jun'09	Jun'08	Jun'07	Jun'06	Jun'05	Jun'04	Jun'03	Jun'02	Jun'01	Jun'00	Jun'99	Jun'98	Jun'97

Sales/Revenue	331.84B	281.72B	245.12B	211.91B	198.27B	168.09B	143.01B	125.84B	110.36B	96.57B	91.15B	93.58B	86.83B	77.85B	73.72B	69.94B	62.48B	58.44B	60.42B	51.12B	44.28B	39.79B	36.84B	32.19B	28.36B	25.3B	22.96B	19.75B	15.26B	11.94B
Revenue Growth %	17.79%	14.93%	15.67%	6.88%	17.96%	17.53%	13.65%	14.03%	14.28%	5.94%	-2.59%	7.77%	11.54%	5.6%	5.4%	11.94%	6.93%	-3.28%	18.19%	15.45%	11.29%	8.02%	14.44%	13.47%	12.13%	10.19%	16.25%	29.39%	27.87%	37.65%
Cost of Goods Sold	106.37B	87.83B	74.11B	65.86B	62.65B	52.23B	46.08B	42.91B	38.35B	34.26B	32.78B	33.04B	27.08B	20.39B	17.53B	15.58B	12.39B	12.15B	11.6B	10.69B	7.65B	6.03B	6.72B	6.06B	5.19B	3.46B	3B	1.8B	1.44B	1.61B
COGS % of Revenue	32.06%	31.18%	30.24%	31.08%	31.6%	31.07%	32.22%	34.1%	34.75%	35.48%	35.96%	35.3%	31.18%	26.19%	23.78%	22.27%	19.84%	20.8%	19.2%	20.92%	17.28%	15.16%	18.23%	18.82%	18.3%	13.66%	13.08%	9.14%	9.41%	13.51%
Gross Profit	225.47B	193.89B	171.01B	146.05B	135.62B	115.86B	96.94B	82.93B	72.01B	62.31B	58.37B	60.54B	59.76B	57.46B	56.19B	54.37B	50.09B	46.28B	48.82B	40.43B	36.63B	33.76B	30.12B	26.13B	23.17B	21.84B	19.95B	17.94B	13.83B	10.32B
Gross Margin %	67.94%	68.82%	69.76%	68.92%	68.4%	68.93%	67.78%	65.9%	65.25%	64.52%	64.04%	64.7%	68.82%	73.81%	76.22%	77.73%	80.16%	79.2%	80.8%	79.08%	82.72%	84.84%	81.77%	81.18%	81.7%	86.34%	86.92%	90.86%	90.59%	86.49%
Gross Profit Growth %	16.28%	13.38%	17.09%	7.69%	17.06%	19.52%	16.89%	15.17%	15.56%	6.74%	-3.58%	1.32%	3.99%	2.26%	3.36%	8.54%	8.23%	-5.2%	20.76%	10.37%	8.52%	12.08%	15.27%	12.75%	6.1%	9.46%	11.21%	29.78%	33.93%	29.64%
Operating Expenses	70.23B	65.36B	61.58B	57.53B	52.24B	45.94B	43.98B	39.97B	36.95B	32.98B	32.3B	42.38B	31.87B	30.7B	28.24B	27.2B	25.99B	25.92B	26.55B	21.99B	20.16B	19.2B	21.09B	16.58B	11.26B	10.12B	8.95B	7.9B	7.12B	5.45B
OpEx % of Revenue	21.16%	23.2%	25.12%	27.15%	26.35%	27.33%	30.75%	31.77%	33.48%	34.15%	35.43%	45.29%	36.7%	39.44%	38.3%	38.9%	41.6%	44.35%	43.94%	43.02%	45.53%	48.25%	57.24%	51.52%	39.71%	40.01%	38.98%	40.01%	46.63%	45.68%
Selling, General & Admin	34.67B	32.88B	32.06B	30.33B	27.73B	25.22B	24.71B	23.1B	22.22B	19.94B	19.2B	20.32B	20.49B	20.29B	18.43B	18.16B	17.28B	16.91B	18.39B	14.87B	13.58B	13.1B	13.31B	9.99B	6.96B	5.74B	5.18B	3.92B	3.49B	3.03B
SG&A % of Revenue	10.45%	11.67%	13.08%	14.31%	13.98%	15.01%	17.28%	18.35%	20.14%	20.65%	21.06%	21.72%	23.59%	26.06%	24.99%	25.97%	27.65%	28.94%	30.43%	29.09%	30.66%	32.92%	36.12%	31.03%	24.53%	22.7%	22.55%	19.85%	22.87%	25.4%
Research & Development	35.56B	32.49B	29.51B	27.2B	24.51B	20.72B	19.27B	16.88B	14.73B	13.04B	11.99B	12.05B	11.38B	10.41B	9.81B	9.04B	8.71B	9.01B	8.16B	7.12B	6.58B	6.18B	7.78B	4.66B	4.31B	4.38B	3.77B	2.97B	2.5B	1.93B
R&D % of Revenue	10.72%	11.53%	12.04%	12.83%	12.36%	12.32%	13.47%	13.41%	13.34%	13.5%	13.15%	12.87%	13.11%	13.37%	13.31%	12.93%	13.95%	15.42%	13.51%	13.93%	14.87%	15.54%	21.12%	14.47%	15.18%	17.31%	16.44%	15.04%	16.39%	16.13%
Other Operating Expenses	0	0	0	0	0	0	0	0	0	306M	1.11B	10.01B	0	0	0	0	0	0	0	0	0	-87M	0	0	0	0	-3M	1.01B	1.02B	495M
Operating Income	155.24B	128.53B	109.43B	88.52B	83.38B	69.92B	52.96B	42.96B	35.06B	29.02B	26.08B	18.16B	27.76B	26.76B	21.76B	27.16B	24.1B	20.36B	22.27B	18.44B	16.47B	14.56B	9.03B	9.54B	11.91B	11.72B	11.01B	10.04B	6.71B	4.87B
Operating Margin %	46.78%	45.62%	44.64%	41.77%	42.06%	41.59%	37.03%	34.14%	31.77%	30.06%	28.61%	19.41%	31.97%	34.38%	29.52%	38.83%	38.57%	34.85%	36.86%	36.07%	37.2%	36.6%	24.53%	29.65%	41.99%	46.33%	47.94%	50.86%	43.97%	40.81%
Operating Income Growth %	20.78%	17.45%	23.62%	6.16%	19.26%	32.02%	23.28%	22.54%	20.79%	11.3%	43.59%	-34.58%	3.72%	22.98%	-19.87%	12.71%	18.34%	-8.57%	20.79%	11.94%	13.12%	61.18%	-5.35%	-19.86%	1.62%	6.49%	9.59%	49.67%	37.75%	58.25%
EBITDA	193.77B	162.68B	131.72B	102.38B	97.84B	81.6B	65.75B	54.64B	45.32B	37.8B	32.7B	24.12B	32.97B	30.52B	24.73B	29.93B	26.77B	22.93B	24.33B	19.88B	17.38B	15.42B	10.22B	10.94B	12.99B	13.26B	12.26B	10.97B	7.73B	5.43B
EBITDA Margin %	58.39%	57.74%	53.74%	48.31%	49.35%	48.55%	45.98%	43.42%	41.06%	39.15%	35.87%	25.77%	37.97%	39.2%	33.54%	42.79%	42.84%	39.23%	40.26%	38.88%	39.24%	38.75%	27.75%	33.98%	45.81%	52.4%	53.39%	55.55%	50.67%	45.48%
EBITDA Growth %	19.11%	23.51%	28.65%	4.64%	19.9%	24.1%	20.34%	20.57%	19.88%	15.61%	35.58%	-26.85%	8.03%	23.41%	-17.37%	11.79%	16.78%	-5.76%	22.38%	14.41%	12.71%	50.84%	-6.56%	-15.82%	-1.98%	8.16%	11.73%	41.83%	42.48%	52.56%
D&A (Non-Cash Add-back)	38.53B	34.15B	22.29B	13.86B	14.46B	11.69B	12.8B	11.68B	10.26B	8.78B	6.62B	5.96B	5.21B	3.75B	2.97B	2.77B	2.67B	2.56B	2.06B	1.44B	903M	855M	1.19B	1.39B	1.08B	1.54B	1.25B	926M	1.02B	557M
EBIT	168.99B	126.01B	110.72B	91.28B	85.78B	73.45B	55.63B	46.37B	39.21B	32.12B	26.88B	19.29B	28.42B	27.48B	22.65B	28.37B	25.16B	19.86B	23.92B	18.44B	16.47B	14.56B	9.03B	9.54B	11.91B	11.72B	11.01B	10.04B	6.71B	4.87B
Net Interest Income	250M	262M	222M	1.03B	31M	-215M	89M	76M	-519M	-835M	-1.24B	-781M	-597M	-429M	-380M	605M	-151M	706M	888M	1.32B	1.51B	0	0	0	0	0	0	0	0	0
Interest Income	3.3B	2.65B	3.16B	2.99B	2.09B	2.13B	2.68B	2.76B	2.21B	1.39B	0	0	0	0	0	900M	0	744M	888M	1.32B	1.51B	0	0	0	0	0	0	0	0	0
Interest Expense	3.05B	2.38B	2.94B	1.97B	2.06B	2.35B	2.59B	2.69B	2.73B	2.22B	1.24B	781M	597M	429M	380M	295M	151M	38M	0	0	0	0	0	0	0	0	0	0	0	0
Other Income/Expense	10.7B	-4.9B	-1.65B	788M	333M	1.19B	77M	729M	1.42B	876M	-439M	346M	61M	288M	504M	910M	915M	-542M	1.54B	1.66B	1.79B	2.07B	3.16B	1.51B	-397M	-195M	3.27B	1.85B	407M	443M
Pretax Income	165.93B	123.63B	107.79B	89.31B	83.72B	71.1B	53.04B	43.69B	36.47B	29.9B	25.64B	18.51B	27.82B	27.05B	22.27B	28.07B	25.01B	19.82B	23.81B	20.1B	18.26B	16.63B	12.2B	11.05B	11.51B	11.53B	14.28B	11.89B	7.12B	5.31B
Pretax Margin %	50%	43.88%	43.97%	42.14%	42.22%	42.3%	37.08%	34.72%	33.05%	30.96%	28.13%	19.78%	32.04%	34.75%	30.2%	40.13%	40.03%	33.92%	39.41%	39.32%	41.24%	41.79%	33.11%	34.34%	40.59%	45.56%	62.18%	60.22%	46.63%	44.52%
Income Tax	32.19B	21.8B	19.65B	16.95B	10.98B	9.83B	8.76B	4.45B	19.9B	4.41B	5.1B	6.31B	5.75B	5.19B	5.29B	4.92B	6.25B	5.25B	6.13B	6.04B	5.66B	4.37B	4.03B	3.52B	3.68B	3.8B	4.85B	4.11B	2.63B	1.86B
Effective Tax Rate %	19.4%	17.63%	18.23%	18.98%	13.11%	13.83%	16.51%	10.18%	54.57%	14.76%	19.89%	34.12%	20.65%	19.18%	23.75%	17.53%	25%	26.5%	25.75%	30.03%	31.01%	26.31%	33.03%	31.87%	32%	33.01%	34%	34.53%	36.91%	35%
Net Income	133.75B	101.83B	88.14B	72.36B	72.74B	61.27B	44.28B	39.24B	16.57B	25.49B	20.54B	12.19B	22.07B	21.86B	16.98B	23.15B	18.76B	14.57B	17.68B	14.06B	12.6B	12.25B	8.17B	7.53B	7.83B	7.35B	9.42B	7.79B	4.49B	3.45B
Net Margin %	40.31%	36.15%	35.96%	34.15%	36.69%	36.45%	30.96%	31.18%	15.02%	26.39%	22.53%	13.03%	25.42%	28.08%	23.03%	33.1%	30.02%	24.93%	29.26%	27.51%	28.45%	30.8%	22.17%	23.4%	27.6%	29.04%	41.04%	39.42%	29.42%	28.94%
Net Income Growth %	31.34%	15.54%	21.8%	-0.52%	18.72%	38.37%	12.85%	136.8%	-34.99%	24.1%	68.45%	-44.76%	0.97%	28.77%	-26.66%	23.4%	28.77%	-17.6%	25.71%	11.64%	2.82%	50.02%	8.46%	-3.81%	6.58%	-22.03%	21.01%	73.39%	29.99%	57.36%
Net Income (Continuing)	133.75B	101.83B	88.14B	72.36B	72.74B	61.27B	44.28B	39.24B	16.57B	25.49B	20.54B	12.19B	22.07B	21.86B	16.98B	23.15B	18.76B	14.57B	17.68B	14.06B	12.6B	12.25B	8.17B	7.53B	7.83B	7.72B	9.42B	7.79B	4.49B	3.45B
Discontinued Operations	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Minority Interest	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
EPS (Diluted)	17.95	13.64	11.80	9.68	9.65	8.05	5.76	5.06	2.13	3.25	2.10	1.48	2.63	2.58	2.00	2.69	2.10	1.62	1.87	1.42	1.20	1.12	0.75	0.69	0.70	0.66	0.85	0.71	0.42	0.33
EPS Growth %	31.6%	15.59%	21.9%	0.31%	19.88%	39.76%	13.83%	137.56%	-34.46%	54.76%	41.89%	-43.73%	1.94%	29%	-25.65%	28.1%	29.63%	-13.37%	31.69%	18.33%	7.14%	49.33%	8.7%	-1.43%	6.06%	-22.35%	19.72%	69.05%	27.27%	50%
EPS (Basic)	18.00	13.70	11.86	9.72	9.70	8.12	5.82	5.11	2.15	3.29	2.12	1.49	2.66	2.61	2.02	2.73	2.13	1.63	1.90	1.44	1.21	1.13	0.76	0.70	0.72	0.69	0.89	0.77	0.46	0.36
Diluted Shares Outstanding	7.45B	7.46B	7.47B	7.47B	7.54B	7.61B	7.68B	7.75B	7.79B	7.83B	8.01B	8.25B	8.4B	8.47B	8.51B	8.59B	8.93B	9B	9.47B	9.89B	10.53B	10.91B	10.89B	10.88B	11.11B	11.15B	11.07B	10.96B	10.72B	10.42B
Basic Shares Outstanding	7.43B	7.43B	7.43B	7.45B	7.5B	7.55B	7.61B	7.67B	7.7B	7.75B	7.92B	8.18B	8.3B	8.38B	8.4B	8.49B	8.81B	8.95B	9.33B	9.74B	10.44B	10.84B	10.8B	10.72B	10.81B	10.68B	10.33B	10.06B	9.73B	9.55B
Dividend Payout Ratio	19.77%	23.65%	24.7%	27.36%	24.93%	26.96%	34.18%	35.2%	76.63%	46.47%	53.59%	81.05%	40.22%	34.1%	37.61%	22.38%	24.4%	30.67%	22.71%	27.05%	28.14%	294.7%	21.17%	11.38%	-	-	0.14%	0.36%	0.62%	0.43%

Key Metrics

Growth RegimeAccelerating

ProfitabilityStrong

Balance SheetFortress

Cash FlowRobust

Top Statement Risk

AI capex margin compression

Verified Source

Metrics are mathematically derived from official filings.

SEC 10-K (2026Q4)

Cloud-Led Growth Accelerates

Revenue growth accelerated to 17.7% in 2026Q4, up from 15.2% a year earlier, per the latest quarterly report, driven by sustained double-digit expansion across all segments.

The sequential acceleration from 16.7% in 2026Q2 to 17.7% in 2026Q4 suggests that Azure's consumption growth and AI-related services are gaining momentum, offsetting any cyclical softness in PC and gaming. The consistency of growth above 12% for the past eight quarters indicates a durable demand environment, likely supported by enterprise digital transformation and AI infrastructure buildout. Investors should monitor whether this pace can be sustained as the AI investment cycle matures.

Gross Margin Erosion from AI Mix

Gross margin declined from 70.1% in 2024Q3 to 67.2% in 2026Q4, as reported in financial statements, reflecting the dilutive impact of AI infrastructure costs and lower-margin hardware sales.

The 290 basis point contraction over eight quarters appears to be driven by the scaling of Azure's AI compute, which carries higher depreciation and energy costs, and the mix shift toward devices and gaming. Despite this, gross margin remains above 67%, still superior to most peers, indicating that Microsoft retains pricing power in its software franchises. The trend warrants monitoring as AI capacity expansion continues, potentially pressuring margins further before efficiency gains materialize.

Operating Leverage Intact Despite AI Spend

Operating margin expanded to 45.1% in 2026Q4 from 43.1% in 2024Q4, per SEC filings, as revenue growth outpaced operating expense growth, demonstrating strong operating leverage.

While gross margin declined, operating margin improved by 200 basis points over the same period, indicating that R&D and SG&A grew slower than revenue. This suggests that Microsoft is scaling its cloud and software businesses efficiently, with incremental revenue flowing through to operating income. The recent extension of server useful life may have contributed to this margin tailwind, but the underlying cost discipline appears solid.

Net Income Volatility Raises Questions

Net margin swung from 35.7% in 2026Q1 to 47.3% in 2026Q2, based on reported figures, driven by non-operating items and tax effects, highlighting earnings quality concerns.

The 11.6 percentage point swing in net margin within two quarters is unlikely to be explained by operational performance alone, suggesting the influence of one-time gains, tax adjustments, or investment income. EPS growth of 59.8% in 2026Q2 versus 12.7% in 2026Q1 further underscores the volatility. Investors should focus on operating income trends and adjust for non-recurring items to assess underlying profitability.

R&D and SG&A Scaling Efficiently

R&D and SG&A combined grew only 12% year-over-year in 2026Q4, while revenue grew 17.7%, as per the income statement, indicating disciplined expense management.

The slower growth in operating expenses relative to revenue is a key driver of operating margin expansion, even as gross margin declined. R&D intensity (as a percentage of revenue) fell from 12.5% in 2024Q3 to 11.1% in 2026Q4, suggesting that Microsoft is leveraging its existing R&D investments across a larger revenue base. This efficiency may be partly due to the capitalization of certain AI development costs, but the trend appears favorable.

AI-Driven Inflection in 2026

The 2026 fiscal year marked a clear inflection, with revenue growth re-accelerating to 17.7% and operating margin reaching 45.1%, as reported in quarterly results, signaling AI monetization.

The transition from 2025 to 2026 shows a step-up in growth and profitability, likely driven by the integration of AI capabilities across Azure, Office, and Dynamics. The increase in revenue growth from 13-15% in 2025 to 17-18% in 2026 suggests that AI services are beginning to contribute meaningfully to top-line results. This inflection appears sustainable if AI demand continues to outpace the capacity buildout, but the heavy capex required poses a risk to future cash flows.

AI Capex Threatens Margin Trajectory

The 290 basis point gross margin decline since 2024Q3, per financial statements, may signal that AI infrastructure costs are outpacing revenue, pressuring profitability if pricing power fades.

Short-sellers could argue that the margin compression is not temporary but structural, as AI compute costs rise with demand and competition intensifies. The extension of server useful life may be masking true depreciation expense, and the lack of reported EPS in the latest earnings event adds uncertainty. If Azure growth decelerates or AI monetization disappoints, the market could re-rate the stock lower, especially given its premium valuation.

MSFT — Frequently Asked Questions

Quick answers to the most common questions about buying MSFT stock.

What was Microsoft Corporation's (MSFT) revenue in 2026?

For fiscal year 2026, Microsoft Corporation (MSFT) reported total revenue of $331.84B. This represents a 2680.2% increase compared to $11.94B in 1997.

Is Microsoft Corporation (MSFT) profitable?

Microsoft Corporation (MSFT) is profitable, generating $133.75B in net income for the fiscal year ending 2026 with a net profit margin of 40.3%.

What is Microsoft Corporation's operating profit margin?

Microsoft Corporation (MSFT) reported an operating income of $155.24B, resulting in an operating profit margin of 46.8%. This margin reflects the operational efficiency of the business before interest and taxes.

What is Microsoft Corporation's gross profit and gross margin?

Microsoft Corporation (MSFT) generated $225.47B in gross profit for the year, representing a gross profit margin of 67.9%. This demonstrates the company's core pricing power and production efficiency.