MSFT · 10-Q · 2026Q3

MICROSOFT CORP

Filed 2026-10-28 · Technology · View original filing on EDGAR

Ranked Events

• Commercial Remaining Performance ObligationsImportance 81 · Surprise 64
  Commercial remaining performance obligations increased 73% to $677 billion in the first quarter of fiscal 2027. The measure covers commercial revenue allocated to obligations not yet fulfilled, including unearned…
• Remaining Performance ObligationsImportance 81 · Surprise 64
  Commercial remaining performance obligation increased 73% year over year to $677 billion in the first quarter of fiscal 2027. It includes commercial revenue allocated to remaining obligations across Azure, Microsoft…
• Azure Demand and GrowthImportance 76 · Surprise 56
  Azure revenue increased 48% year over year, rising $10.8 billion, with growth across all workloads and demand for services across the platform. Azure includes consumption-based non-GPU services such as compute, data…
• AI Infrastructure Investment OutlookImportance 64 · Surprise 42
  Microsoft said it will continue capital expenditures on cloud offerings, AI training, and related infrastructure, including new facilities, datacenters, and computer systems. Cash used in investing activities increased…
• Gross Margin DriversImportance 54 · Surprise 40
  Gross margin increased $8.9 billion, or 17%, to $62.559 billion in the first quarter of fiscal 2027. Cost of revenue increased $5.7 billion, or 24%, primarily with growth in Agents and Infra; that segment's cost of…
• Revenue Performance and MixImportance 54 · Surprise 40
  For the three months ended September 30, 2026, revenue increased 19% to $92.279 billion, driven by Agents and Infra revenue growth of 25% to $76.795 billion; Devices and Consumer revenue fell 3% to $15.484 billion.…
• Capital Return ProgramImportance 52 · Surprise 30
  Microsoft repurchased 6 million shares for $2.9 billion in the three months ended September 30, 2026, compared with 8 million shares for $4.0 billion in the prior-year quarter. At September 30, $37.7 billion remained…
• Tax Audit ContingencyImportance 52 · Surprise 42
  The IRS is auditing Microsoft for tax years 2014 to 2017 and issued Notices of Proposed Adjustment for tax years 2004 to 2013. The IRS is seeking an additional $28.9 billion, plus penalties and interest, with the…
• Tax Audit Contingency (IRS NOPAs)Importance 50 · Surprise 24
  Microsoft remains under IRS audit for tax years 2014–2017 and received Notices of Proposed Adjustment on September 26, 2023, concerning tax years 2004–2013. The IRS seeks an additional $28.9 billion, plus penalties and…
• Microsoft 365 Adoption and UpsellImportance 48 · Surprise 40
  Microsoft 365 cloud revenue increased 17%, with commercial cloud growth driven by higher revenue per user, continued upsell to premium offerings, and increased usage-based services consumption, primarily GitHub…
• OpenAI Investment GainsImportance 45 · Surprise 64
  Microsoft reported $272 million of net gains from investments in OpenAI in the quarter ended September 30, 2026, compared with $4.1 billion of net losses in the prior-year quarter. The current-quarter gains increased…
• PC Demand and Windows OEMImportance 41 · Surprise 48
  Windows OEM and devices revenue fell 22%, a $1.0 billion decrease, as the prior-year benefit from Windows 10 end-of-support demand did not recur. OEMs and channel partners drew down inventory, while weaker PC market…
• Liquidity and Cash PositionImportance 38 · Surprise 24
  Cash, cash equivalents, and short-term investments totaled $64.5 billion at September 30, 2026, down from $76.8 billion at June 30, 2026; equity and other investments totaled $37.8 billion. Cash from operations…
• Search Advertising GrowthImportance 29 · Surprise 22
  Search and advertising revenue excluding traffic acquisition costs increased 12% year over year, with higher rates and volume across LinkedIn, Edge, and Bing. The broader Search and advertising revenue measure…
• Interest Expense TrendsImportance 28 · Surprise 30
  Interest expense increased to $870 million in the three months ended September 30, 2026, from $698 million in the prior-year quarter, a 25% increase. The increase primarily reflected higher finance lease interest…
• Operating Expense TrendsImportance 24 · Surprise 14
  Total operating expenses increased $975 million, or 6%, to $16.644 billion, driven by continued investment in research and development compute capacity and talent; total company headcount decreased 2%. Research and…
• Gaming Demand and Mix ShiftImportance 23 · Surprise 22
  Xbox revenue decreased 2%, reflecting declines in both content and services and hardware. Xbox content and services revenue fell 2% as third-party content and Game Pass declined, partly offset by growth in first-party…
• Income Tax Rate ChangesImportance 15 · Surprise 14
  Microsoft's effective tax rate increased to 20% for the three months ended September 30, 2026, from 19% a year earlier. The increase primarily reflected decreased tax benefits from stock-based compensation and changes…
• Supply Chain Constraints and RisksImportance 10 · Surprise 6
  Microsoft’s datacenter operations depend on permitted and buildable land, predictable energy, networking supplies, and servers, including GPUs and other components. Most devices are made by third-party contract…

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