MSFT · 10-K · 2026A · Full report

FX / Currency Headwinds

MICROSOFT CORP · 2026-07-29 · Importance 24 · Surprise 14

Microsoft generates a significant portion of revenue and expenses internationally, with many transactions denominated in currencies other than the U.S. dollar. In fiscal 2026, changes in the U.S. dollar relative to certain foreign currencies increased reported revenue and had no material impact on reported international operating expenses. Revenue and operating income each benefited from a 2% favorable foreign-currency impact, while segment revenue, gross margin, and operating income in Productivity and Business Processes benefited by 2%, 3%, and 3%, respectively. Intelligent Cloud cost of revenue included a 2% unfavorable foreign-currency impact.

Key facts

• Revenue, gross margin, and operating income both included a favorable foreign currency impact of 2% overall; Productivity and Business Processes revenue, gross margin, and operating income included favorable foreign currency impacts of 2%, 3%, and 3% respectively; Intelligent Cloud cost of revenue included an unfavorable foreign currency impact of 2%; More Personal Computing operating income included a favorable foreign currency impact of 2%. source