MSFT · 10-K · 2025A

MICROSOFT CORP

Filed 2025-07-30 · Technology

Ranked Events

• Outstanding IndebtednessImportance 76 · Surprise 56
  The contractual obligations table shows long-term debt principal payments of $49,206 million and related interest payments of $27,036 million as of June 30, 2025. Cash used in financing increased $13,900 million to…
• Tax Audit Contingency (IRS NOPAs)Importance 71 · Surprise 60
  Microsoft remains under IRS audit for tax years 2014–2017 and received Notices of Proposed Adjustment (NOPAs) on September 26, 2023 for tax years 2004–2013 related to intercompany transfer pricing. In the NOPAs the IRS…
• Liquidity and Cash PositionImportance 71 · Surprise 48
  Cash, cash equivalents and short-term investments totaled $94.6 billion as of June 30, 2025 (up from $75.5 billion as of June 30, 2024), and equity and other investments were $15.4 billion. The company states its…
• Microsoft Cloud Demand TrendsImportance 70 · Surprise 56
  Microsoft Cloud showed broad-based, above-trend demand with Microsoft Cloud revenue up 23% to $168.9 billion, driven by strong consumption of Azure and Microsoft 365 Commercial cloud. Azure and other cloud services…
• R&D Investment in AIImportance 68 · Surprise 58
  Research and development expense for fiscal 2025 was $32,488 million, an increase of $2,978 million or 10% versus fiscal 2024. The increase was driven by investments in cloud and AI engineering and Gaming, and includes…
• Gross Margin DriversImportance 68 · Surprise 58
  Gross margin increased $22,885 million or 13% to $193,893 million in fiscal 2025 driven by growth across each reportable segment. Cost of revenue rose $13,717 million or 19%, predominantly due to expansion of Microsoft…
• Investment Impairments (OpenAI Losses)Importance 65 · Surprise 82
  Other income (expense), net worsened materially year-over-year to a net loss of $4,901 million for fiscal 2025, with net recognized losses on investments increasing to $349 million (from $118 million) primarily due to…
• Datacenter Expansion CommitmentsImportance 64 · Surprise 42
  The company is evaluating and expanding datacenter locations and increasing server capacity to meet growing AI demand and notes material contractual commitments for construction and purchases as of June 30, 2025.…
• Datacenter Capacity ExpansionImportance 64 · Surprise 42
  Microsoft is actively expanding datacenter locations and server capacity to meet growing AI and cloud demand, citing explicit evaluation of new datacenter sites and increased server capacity requirements. The company…
• AI Infrastructure InvestmentImportance 62 · Surprise 58
  Microsoft states investments in cloud and AI infrastructure increased operating costs and weighed on margins in fiscal 2025, noting Microsoft Cloud gross margin percentage declined to 69% due to scaling AI…
• Gaming Demand and Mix ShiftImportance 61 · Surprise 66
  Gaming revenue mix shifted materially toward content and services: Xbox content and services revenue increased 16% while overall Gaming revenue rose 9%, reflecting higher subscription and in‑game monetization. In…
• Unearned Revenue and BacklogImportance 56 · Surprise 24
  Microsoft’s unearned revenue (backlog) totaled $67,265 million as of June 30, 2025, with sizable near-term recognition amounts—$25,191 million expected in the quarter ending September 30, 2025 and $19,733 million in…
• Product Launch and TransitionImportance 56 · Surprise 58
  Microsoft cites product transitions that affected purchasing patterns, including launch activity for Office 2024 which increased transactional Office purchases. Microsoft 365 Commercial products and cloud services…
• Capital Return ProgramImportance 54 · Surprise 14
  During fiscal 2025 Microsoft repurchased 31 million shares for $13.0 billion (versus $12.0 billion in fiscal 2024) under its share repurchase program, with all repurchases made using cash resources. As of June 30,…
• Revenue Performance and MixImportance 54 · Surprise 40
  Total revenue for fiscal year 2025 was $281,724 million, an increase of $36,602 million or 15% versus fiscal year 2024. Microsoft Cloud revenue increased 23% to $168.9 billion in fiscal 2025, driven by Microsoft 365…
• Acquisition / Partnership / DivestitureImportance 53 · Surprise 60
  Microsoft maintains a long-term strategic partnership with OpenAI established in 2019, is a major investor, and recognizes reciprocal revenue-sharing and exclusive Azure API arrangements; the company also holds rights…
• OpenAI Strategic PartnershipImportance 52 · Surprise 42
  Microsoft reiterates its long‑term strategic partnership with OpenAI, including investment, reciprocal revenue‑sharing arrangements, and rights to OpenAI intellectual property for product integration. The filing states…
• Operating Expense TrendsImportance 50 · Surprise 58
  Total operating expenses increased $3,790 million or 6% to $65,365 million in fiscal 2025, driven by investments in cloud and AI engineering and Gaming, including the impact of the Activision Blizzard acquisition.…
• Remaining Performance ObligationsImportance 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…
• Geographic Revenue ShiftImportance 41 · Surprise 48
  Microsoft notes a material geographic mix of earnings with U.S. pre-tax income of $69.2 billion and foreign pre-tax income of $54.4 billion in fiscal 2025, compared with $62.9 billion and $44.9 billion in fiscal 2024,…

Revenue by Product (in millions)

Revenue by Geography (in millions)