Microsoft Corporation (MSFT)
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Microsoft earned $98.0 billion in the nine months ended March 31, 2026, up 31 percent from a year earlier. Free cash flow — the money left after every investment — went from $46.0 billion to $47.3 billion, a rise of 2.8 percent. In between sit $80.1 billion of datacenter spending, a $4.5 billion book gain from the dilution of the OpenAI stake, and $62.9 billion of finance lease liabilities that now exceed every bond the company has issued. We read the filings line by line — and follow the profit to see where it goes before it reaches a shareholder.
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AI Rating
Sells AIMicrosoft verkauft KI unmittelbar als Umsatzquelle: Azure-KI-Dienste, Microsoft 365 Copilot und Azure AI Foundry sind im Geschäftsbericht als eigene Produktlinien beschrieben, und der Quartalsbericht führt den Rückgang der Cloud-Bruttomarge ausdrücklich auf die wachsende Nutzung von KI-Produkten zurück.
View the full file — quotes, sources, reviewed filings
„Azure AI offerings provide a competitive advantage as companies seek ways to optimize and scale their business with AI. We offer supercomputing power for AI at scale to run large workloads, complemented by our rapidly expanding portfolio of AI cloud services (including the latest models) and hardware, which includes custom-built silicon and strong partnerships with chip manufacturers."
Azure-KI-Angebote verschaffen uns einen Wettbewerbsvorteil, weil Unternehmen nach Wegen suchen, ihr Geschäft mit KI zu optimieren und zu skalieren. Wir bieten Supercomputing-Leistung fuer KI im großen Maßstab, ergänzt um unser rasch wachsendes Portfolio an KI-Cloud-Diensten (einschließlich der neuesten Modelle) und Hardware, zu der maßgeschneiderte Chips und enge Partnerschaften mit Chipherstellern gehören.
„We are investing in artificial intelligence (“AI”) across the entire company and infusing generative AI capabilities into our consumer and commercial offerings."
Wir investieren unternehmensweit in künstliche Intelligenz (KI) und statten unsere Angebote fuer Verbraucher und Geschäftskunden mit generativen KI-Fähigkeiten aus.
„Microsoft Cloud gross margin percentage decreased to 67% driven by continued investments in AI infrastructure and growing AI product usage, offset in part by efficiency gains in Azure and Microsoft 365 Commercial cloud."
Die Bruttomarge von Microsoft Cloud sank auf 67 Prozent, getrieben von den anhaltenden Investitionen in KI-Infrastruktur und der wachsenden Nutzung von KI-Produkten, teilweise ausgeglichen durch Effizienzgewinne bei Azure und Microsoft 365 Commercial cloud.
Filings Reviewed: 10-Q 2026-04-29 · 10-Q 2026-01-28 · 10-Q 2025-10-29 · 10-Q 2025-04-30 · 10-K 2025-07-30 · 10-K 2024-07-30
Rated on July 29, 2026 · How the Rating Is Built
Highlighted are things our editorial team noticed: green = stands out as strong, red = deserves a closer look. No single metric is a verdict on its own — always read it in context.
Quarterly Figures
| Quarter | EPS (Earnings Per Share) | EPS YoY (%) | Sales ($M) | Sales YoY (%) | Net Margin (%) | OCF ($M) | FCF ($M) |
|---|---|---|---|---|---|---|---|
| 2024: Q4 | 3.23 | 10.20 | 69,632 | 12.30 | 34.60 | 22,291 | 6,487 |
| 2025: Q1 | 3.46 | 17.90 | 70,066 | 13.30 | 36.90 | 37,044 | 20,299 |
| 2025: Q2 | 3.65 | 23.80 | 76,441 | 18.10 | 35.60 | 42,647 | 25,568 |
| 2025: Q3 | 3.72 | 12.50 | 77,673 | 18.40 | 35.70 | 45,057 | 25,663 |
| 2025: Q4 | 5.16 | 59.70 | 81,273 | 16.70 | 47.30 | 35,758 | 5,882 |
| 2026: Q1 | 4.27 | 23.30 | 82,886 | 18.30 | 38.30 | 46,679 | 15,803 |
- EPS (Earnings Per Share):
- Quarterly profit divided by the total share count — how much of the profit works out to a single share.
- YoY (Year over Year):
- Change versus the same quarter a year ago — this is how you compare without seasonal distortion (e.g. the holiday shopping season).
- Sales:
- All revenue for the quarter, before any costs are deducted — the top line of the income statement.
- Net Margin:
- What percentage of sales is left over as profit in the end. Negative means the company is posting a loss.
- OCF (Operating Cash Flow):
- The cash that actually flows into the till from the core business during the quarter — harder to dress up than book profit.
- FCF (Free Cash Flow):
- Operating cash flow minus capital expenditures — the money that's genuinely free to use, say for paying down debt, buybacks, or dividends.
Assessment: Opportunities & Risks
Commercial remaining performance obligation rose 99 percent to $627 billion as of March 31, 2026; Azure grew 40 percent over the preceding nine months and Microsoft Cloud reached $155.1 billion (prior year $122.2 billion). This is contracted revenue, not a statement of intent (10-Q as of March 31, 2026).
Operating margin of 47.4 percent in the nine months ended March 31, 2026 (prior year 45.9 percent), net margin 40.5 percent, return on equity roughly 34 percent (data as of July 28, 2026). Even stripping out the OpenAI book gain, $93.5 billion of profit remains in nine months.
Free cash flow grew only 2.8 percent in the nine months ended March 31, 2026 ($47.3 billion against $46.0 billion) while net income rose 31 percent. It had already fallen in fiscal year 2025: $71.6 billion after $74.1 billion. The cause is capital expenditure (FY 2025: $64.6 billion; nine months of FY 2026: $80.1 billion).
$4.5 billion of the $98.0 billion of net income in the nine months ended March 31, 2026 is a non-cash book gain from the dilution of the OpenAI stake. Microsoft discloses it transparently and removes it itself — the adjusted increase is 22 percent rather than 31 (10-Q as of March 31, 2026, "Non-GAAP Financial Measures").
Stockholders' equity of $414.4 billion, cash and short-term investments of $78.3 billion and bond debt of $40.3 billion as of March 31, 2026. Even including $62.9 billion of finance leases, leverage stays low relative to earning power: $2.2 billion of interest expense in nine months against $114.6 billion of operating income.
Microsoft Cloud gross margin fell to 66 percent in the quarter ended March 31, 2026; cost of revenue in Intelligent Cloud rose 45 percent over nine months against 29 percent segment revenue growth. Microsoft itself writes that its investments may decrease operating margins (10-Q as of March 31, 2026, Item 2).
Microsoft remains one of the most profitable companies on earth: a 47.4 percent operating margin, a $627 billion order book and a cloud business that grew 27 percent over nine months. The price of that sits in the same cash flow statement: $80.1 billion of capital expenditure in nine months, free cash flow that is effectively flat, and finance lease liabilities for datacenters that now exceed every bond the company has issued. On top of that comes a $4.5 billion book gain from the OpenAI dilution, which Microsoft strips out itself. Not investment advice.
- Origin: ranking of the 100 largest U.S. stocks by market value (as of July 28, 2026); Microsoft ranked fifth and had no analysis yet.
- Data cut-offs: annual figures from the Form 10-K for fiscal year 2025 (filed July 30, 2025), nine-month figures from the Form 10-Q as of March 31, 2026 (filed April 29, 2026), valuation metrics as of July 28, 2026. The Form 10-K for fiscal year 2026, which ended June 30, 2026, had not been filed as of July 29, 2026.
- Easily confused: Microsoft's fiscal year ends June 30. "Fiscal year 2026" means July 2025 through June 2026 — not calendar 2026.
- Analyses are evergreen; a daily price is not a buy argument.
About the Company
Microsoft Corporation entwickelt und betreut weltweit Software, Dienste, Geräte und Lösungen. Das Segment Productivity and Business Processes umfasst Microsoft 365 Commercial, Enterprise Mobility + Security, Windows Commercial, Power BI, Exchange, SharePoint, Microsoft Teams, Sicherheit und mehr.
| Employees | 228,000 |
|---|---|
| Headquarters | Redmond, WA |
| Website | microsoft.com |
| IPO Date | 13. Mar 1986 |
| Next Earnings | 29. Jul 2026 |
Management
| Name | Title | Birth Year |
|---|---|---|
| Satya Nadella | Chairman & CEO | 1967 |
| Bradford L. Smith LCA | President & Vice Chairman | 1959 |
| Amy E. Hood | Executive VP & CFO | 1972 |
| Takeshi Numoto | Executive VP & Chief Marketing Officer | 1972 |
| Judson B. Althoff | Executive VP & CEO of Commercial Business | 1974 |
| Carolina Dybeck Happe | Executive VP & COO | 1972 |
| Alice L. Jolla | Corporate VP & Chief Accounting Officer | 1966 |
| Matthew Kerner | CTO & Corporate VP of Worldwide Sales and Solutions | – |
| Jonathan Neilson | Vice President of Investor Relations | – |
| Jonathan M. Palmer | Corporate Vice President & Chief Legal Officer | – |
Executives per the latest required filings; titles kept in their original language. Source: fundamental data.
Chart
Interactive price chart (TradingView).
Data as of: July 28, 2026 · Source: fundamental data & SEC filings (annual and quarterly reports, 10-K/10-Q)
Note: pure fact-based analysis, not investment advice and not a solicitation to buy or sell. All figures without guarantee.