MSFT · 10-Q · 2026Q1

MICROSOFT CORP

Filed 2026-04-29 · Technology · View original filing on EDGAR

Ranked Events

• OpenAI Partnership and GainsImportance 90 · Surprise 100
  Microsoft reiterates its long‑term strategic partnership with OpenAI, noting extensions to the partnership in October 2025 and April 2026 and that Microsoft will continue to receive revenue‑sharing payments and hold…
• Operating Cash Flow and Capex TrendsImportance 89 · Surprise 82
  Cash used in investing increased $42.6 billion to $84.7 billion for the nine months ended March 31, 2026, primarily due to a $32.7 billion increase in additions to property and equipment and a $9.1 billion increase in…
• AI Infrastructure InvestmentImportance 78 · Surprise 74
  Management discloses continued, material investments in cloud and AI infrastructure that are increasing operating costs and weighing on margins, driven by demand for AI services and higher usage of AI products such as…
• Uncertain Tax PositionsImportance 71 · Surprise 60
  Microsoft is subject to substantial U.S. tax examinations and received Notices of Proposed Adjustment (NOPAs) from the IRS regarding tax years 2004–2013 seeking an additional $28.9 billion plus penalties and interest;…
• Cloud Services GrowthImportance 65 · Surprise 48
  Total revenue for the three months ended March 31, 2026 increased $12.8 billion or 18% to $82,886 million driven primarily by Microsoft Cloud. Microsoft Cloud revenue was $54.5 billion in the quarter, up 29%…
• Product Launch and TransitionImportance 56 · Surprise 58
  Microsoft 365 Copilot and Microsoft 365 E5 are cited as drivers of higher revenue per user in Microsoft 365 Commercial, contributing to 19% growth in Microsoft 365 Commercial cloud revenues. The company notes…
• Operating Expense TrendsImportance 55 · Surprise 50
  Operating expenses increased $1.5 billion or 9% in the quarter primarily driven by investments in R&D compute capacity, AI talent, and data to support product development across the portfolio. Research and development…
• Gross Margin DriversImportance 54 · Surprise 40
  Gross margin increased $7.9 billion or 16% for the three months ended March 31, 2026 to $56,058 million driven by growth across all segments. Gross margin percentage decreased overall, which the company attributes…
• Liquidity and Cash PositionImportance 49 · Surprise 6
  Microsoft reports cash, cash equivalents, and short-term investments of $78.3 billion as of March 31, 2026 and equity and other investments of $33.7 billion. Management expects existing liquidity, cash flows from…
• Capital Return ProgramImportance 49 · Surprise 6
  During the nine months ended March 31, 2026, Microsoft repurchased 27 million shares for $13.3 billion and declared dividends totaling $20.3 billion, continuing an active capital return policy. As of March 31, 2026,…
• Legal Contingencies and AccrualsImportance 46 · Surprise 42
  Microsoft acknowledges that outcomes of legal proceedings and claims are uncertain and accrues losses when an unfavorable outcome is probable and the amount can be reasonably estimated. In assessing whether to accrue,…
• Gaming and Hardware DeclineImportance 40 · Surprise 56
  Gaming revenue declined, with a $380 million (7%) quarterly decrease driven by lower Xbox content and services and a 33% decline in Xbox hardware revenue due to reduced console volumes. For the nine months, Xbox…
• Commercial Remaining Performance ObligationImportance 25 · Surprise 6
  Microsoft applies judgment to determine standalone selling prices (SSP) for on‑premises licenses sold with Software Assurance (SA), software updates provided at no additional charge, and other bundled offerings. When…
• FX / Currency HeadwindsImportance 24 · Surprise 14
  Microsoft reports that international operations represent a significant portion of its total revenue and expenses and that many items are denominated in non‑U.S. dollar currencies. Fluctuations in the U.S. dollar…
• Impairment of Investment SecuritiesImportance 13 · Surprise 6
  Microsoft reviews debt investments quarterly for credit losses and impairment, evaluating market conditions, issuers' credit quality, and the extent fair value is below cost. If the company plans to sell a security or…
• Goodwill Impairment TestingImportance 10 · Surprise 6
  Microsoft allocates goodwill to reporting units and tests goodwill for impairment annually (May 1) or more frequently if events or changes in circumstances suggest possible impairment. The company uses discounted cash…
• Supply Chain ConstraintsImportance 10 · Surprise 6
  Microsoft’s devices are primarily manufactured by third‑party contract manufacturers, and while Microsoft can typically shift vendors, some products rely on a very small number of qualified suppliers for key…
• R&D Capitalization PolicyImportance 6 · Surprise 6
  Microsoft expenses internal research and development costs until technological feasibility of a software product is established, then capitalizes subsequent software development costs until the product is available for…

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