MSFT MICROSOFT CORP
Microsoft is a technology company that builds AI-powered platforms and applications, generating revenue through cloud-based solutions and services, software licensing and support, online advertising, and device sales. Its reportable segments are Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
How the business makes money
Microsoft earns revenue across a wide range of cloud services, software licensing and support, online advertising delivered to a global audience, and devices. Key product lines called out include Microsoft 365 Commercial and Consumer cloud, LinkedIn, Dynamics 365, Azure and other cloud services, Windows OEM and Devices, Xbox content and services, and search advertising. Its most significant expenses are employee compensation, cloud infrastructure and datacenter investment, product design/manufacturing/marketing/selling costs, and income taxes. The company also has a long-term strategic partnership with OpenAI (extended in October 2025 and April 2026) under which Microsoft is a major investor, receives revenue-sharing payments, and holds rights to OpenAI's intellectual property including models and infrastructure for integration into its products.
Revenue reported to the SEC
| Fiscal year | Revenue (USD) |
|---|---|
| FY2022 | 198.3B |
| FY2023 | 211.9B |
| FY2024 | 245.1B |
| FY2025 | 281.7B |
| FY2026 | 331.8B |
What the filings support
Microsoft Cloud revenue increased 27% year over year to $214.4 billion in fiscal 2026.
Commercial remaining performance obligation increased 84% to $678 billion, indicating a large contracted revenue backlog.
Azure and other cloud services revenue grew 41% year over year, the fastest growth rate among the disclosed product lines.
Revenue grew from $198.27 billion in fiscal 2022 to $331.84 billion in fiscal 2026 based on reported annual figures.
The company maintains a long-term strategic partnership with OpenAI, holding rights to OpenAI's intellectual property, including models and infrastructure, for integration into its own products.
Risks the company discloses
Investments in cloud and AI infrastructure and devices are increasing operating costs and may decrease operating margins.
Datacenter expansion depends on the availability of permitted and buildable land, predictable energy, networking supplies, and servers including graphics processing units, and disruptions in these areas could impact the ability to meet growing AI-driven demand.
Some products contain components for which there are very few qualified suppliers, and extended or unforeseen disruptions or limited availability from these suppliers could impact datacenter operations and device manufacturing.
A significant portion of revenue and expenses is denominated in foreign currencies, so fluctuations in foreign exchange rates may significantly affect reported revenue and expenses.
Changes in global trade policies, including tariffs and other controls on imports or exports, along with geopolitical tension and economic nationalism, could increase supply chain challenges, cost volatility, and adversely affect results of operations.
Could not verify
- The Item 1 Business section describing overall company operations, products, and organizational structure in detail could not be located in the supplied filing text.
- Specific dollar or percentage figures for individual segment revenues (Productivity and Business Processes, Intelligent Cloud, More Personal Computing) beyond the highlighted product-line growth rates were not provided in the supplied text.
- Customer or supplier concentration figures were not stated in the supplied text.
- Details of the metrics referenced at the end of the MD&A excerpt (e.g., specific commercial and other business metrics) were cut off and not fully supplied.
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