MSFT · 10-K · 2025A · Full report

Remaining Performance Obligations

MICROSOFT CORP · 2025-07-30 · Importance 48 · Surprise 6

As of June 30, 2025, expected future recognition of unearned revenue totaled $67,265 million, with $25,191 million expected in the three months ending September 30, 2025 and $19,733 million expected in the quarter ending December 31, 2025. Unearned revenue primarily comprises volume licensing programs that include cloud services and Software Assurance and is generally invoiced annually and recognized ratably over the contract period. The company notes that if customers choose cloud‑based subscriptions over transaction-based licensing, revenue recognition will shift from point-in-time to over the subscription period or upon consumption. The unearned revenue balance therefore represents a significant deferred revenue base supporting future recurring revenue recognition.