Short answer
Microsoft Corporation (MSFT) filed its fiscal 2026 10-K annual report with the SEC on Jul 29, 2026. It reported revenue of $331.8B (+17.8% year over year) and net income of $133.7B.
- Top risk flagged: Regulatory risk: EU AI Act may increase costs or restrict AI model operations in European market
FY2026 key financial metrics · XBRL
- Revenue
- $331.8B
- +17.8% YoY
- Net income
- $133.7B
- +31.3% YoY
- Operating margin
- 46.8%
- +1.2 pp YoY
- Gross margin
- 67.9%
- −0.9 pp YoY
- EPS (diluted)
- $17.95
- +31.6% YoY
- ROE
- 30.2%
- +0.6 pp YoY
- Operating cash flow
- $182.9B
- +34.4% YoY
Source: XBRL data from the Microsoft Corporation (MSFT) FY2026 10-K on SEC EDGAR. USD.
Microsoft Corporation FY2026 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business: Technology company delivering AI, cloud computing, productivity, collaboration, and personal computing platforms and solutions globally
- New emphasis on AI integration: Microsoft 365 Copilot, Azure AI Foundry, and AI-driven security and enterprise services heavily prioritized this year
- Strategic shift: Leading AI platform wave, focusing on integrated AI solutions across cloud, productivity, security, gaming, and digital learning
- Employee count 223,000, with 77,000 in R&D, highlighting significant investment in AI and product innovation
- Noteworthy: Introduction of Azure AI Foundry as a unified AI application development platform and expansion of AI-powered Microsoft 365 Copilot
Management Discussion & Analysis
- Revenue $331.8B, up 18% YoY driven by Microsoft Cloud growth ($214.4B, +27%)
- Operating margin 46.8% vs 45.6%; Gross margin % decreased slightly; Microsoft Cloud gross margin 66% vs prior year (decreased)
- Best segment: Intelligent Cloud revenue $137.8B (+30%), operating income $57.0B (+28%); Worst segment: More Personal Computing revenue $54.1B (-1%), operating income $14.4B (+2%)
- Cash from operations $182.9B (+34%), Capex increased by $51.4B; Share repurchases $16.7B; Dividends $27.0B
- Management investing heavily in AI infrastructure, cautious on supply chain risks, expects sufficient liquidity, tax audit risk with $28.9B IRS claim ongoing
Risk Factors
- Regulatory risk: EU AI Act may increase costs or restrict AI model operations in European market
- Geopolitical threat: Conflicts in Ukraine and Middle East causing sanctions, supply chain disruptions, and increased operating costs
- Supply chain vulnerability: Shortages of semiconductors, power, cooling equipment limit datacenter expansion and increase costs
- Market disruption risk: Competition from hyperscalers, open-source AI, and vertically-integrated rivals threatens cloud and AI services
- Financial risk: IRS audit with $28.9B proposed tax adjustment plus penalties may cause significant tax liabilities
Generated from the filing text; verify against the original. How to read a 10-K
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