MSFT · 10-K · 2026A

MICROSOFT CORP

Filed 2026-07-29 · Technology · View original filing on EDGAR

Ranked Events

• Commercial Remaining Performance ObligationsImportance 81 · Surprise 64
  Commercial remaining performance obligation increased 84% to $678 billion in fiscal 2026, providing a material contracted-revenue indicator. Unearned revenue totaled $75.712 billion at June 30, 2026, including $28.589…
• Gross Margin DriversImportance 66 · Surprise 40
  Gross margin increased 16% to $225.465 billion in fiscal 2026 from $193.893 billion in fiscal 2025. Gross margin percentage decreased slightly because of continued investments in AI infrastructure and growing AI…
• Datacenter Capacity ExpansionImportance 64 · Surprise 42
  Microsoft continues expanding datacenter locations and server capacity to meet growing demand for cloud and AI services. Datacenter expansion depends on permitted and buildable land, predictable energy, networking…
• AI Infrastructure InvestmentImportance 64 · Surprise 42
  Microsoft increased additions to property and equipment by $51.4 billion in fiscal year 2026, contributing to a $139.5 billion increase in cash used in investing activities. Management expects continued capital…
• Microsoft Cloud Demand TrendsImportance 59 · Surprise 48
  Microsoft Cloud revenue increased 27% to $214.4 billion in fiscal year 2026. Azure and other cloud services revenue grew 41%, driven by demand across the platform and continued growth across all workloads. Commercial…
• Tax Audit ContingencyImportance 58 · Surprise 42
  The IRS continues auditing Microsoft for tax years 2014 through 2017, while the audit for tax years 2004 through 2013 has progressed to Notices of Proposed Adjustment. The IRS is seeking an additional $28.9 billion in…
• OpenAI Investment GainsImportance 55 · Surprise 82
  Net gains from investments in OpenAI contributed $6.5 billion to other income in fiscal 2026, compared with $4.8 billion of net losses in fiscal 2025. The fiscal 2026 gains primarily related to a dilution gain from the…
• Liquidity and Cash PositionImportance 54 · Surprise 40
  Cash, cash equivalents, and short-term investments declined to $76.8 billion at June 30, 2026, from $94.6 billion at June 30, 2025. Cash from operations increased $46.8 billion to $182.9 billion, primarily because of…
• OpenAI Strategic PartnershipImportance 53 · Surprise 60
  Microsoft extended its long-term strategic partnership with OpenAI in October 2025 and April 2026. Microsoft remains a major OpenAI investor, retains rights to OpenAI intellectual property including models and…
• Capital Return ProgramImportance 52 · Surprise 30
  Microsoft repurchased 36 million common shares for $16.7 billion in fiscal 2026, compared with 31 million shares for $13.0 billion in fiscal 2025. As of June 30, 2026, $40.6 billion remained available under the $60…
• Product Launch and TransitionImportance 50 · Surprise 58
  Microsoft continued integrating OpenAI intellectual property, including models and infrastructure, into its products under an extended strategic partnership. Microsoft 365 Copilot increased revenue per user and…
• Revenue Performance and MixImportance 45 · Surprise 40
  Fiscal 2026 revenue increased 18% to $331.839 billion from $281.724 billion in fiscal 2025, driven primarily by Microsoft Cloud growth. Microsoft Cloud revenue increased 27% to $214.4 billion, while commercial…
• Operating Expense TrendsImportance 42 · Surprise 14
  Total operating expenses increased 7% to $70.228 billion in fiscal 2026 from $65.365 billion in fiscal 2025. Research and development expense increased 9% to $35.562 billion, driven by compute capacity, AI talent,…
• Distribution Channel Shift to CloudImportance 31 · Surprise 32
  Microsoft's commercial business includes server products, cloud services, Microsoft 365 Commercial products and cloud services, LinkedIn, Dynamics, and enterprise and partner services. Server products revenue increased…
• Search Advertising DemandImportance 30 · Surprise 40
  Search advertising revenue excluding traffic acquisition costs increased 12% in fiscal 2026. Growth reflected higher search volume, increased revenue per search, and benefits from third-party partnerships. Total search…
• Supply Chain ConstraintsImportance 29 · Surprise 24
  Microsoft is expanding datacenter locations and server capacity to address increasing AI-service demand, requiring permitted land, predictable energy, networking supplies, servers, GPUs, and other components. Devices…
• Gaming Demand and Mix ShiftImportance 25 · Surprise 32
  Xbox revenue decreased 7% in fiscal 2026, reflecting declines in both content and services and hardware. Xbox content and services revenue declined 5% against a prior-year comparison that benefited from strong…
• FX / Currency HeadwindsImportance 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…
• Income Tax Rate ChangesImportance 18 · Surprise 14
  Microsoft’s effective tax rate increased to 19% in fiscal 2026 from 18% in fiscal 2025. The increase primarily reflected changes in the mix of earnings and tax expenses between the United States and foreign countries.…
• Competition and Market ShareImportance 10 · Surprise 6
  Microsoft operates in dynamic, highly competitive markets spanning software, devices, and cloud-based services. Competitors continue developing software, devices, and competing cloud offerings for consumers and…

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