Microsoft Corporation (MSFT) Q4 2025 10-Q Quarterly Report
Filed: Jan 28, 2026Period ending Dec 31, 2025
Information Technology
Services-Prepackaged SoftwareSEC EDGAR Microsoft Corporation (MSFT) 10-Q quarterly report for Q4 2025, filed with SEC EDGAR on Jan 28, 2026 for the fiscal period ending Dec 31, 2025. This page provides AI-powered analysis including management discussion & analysis (MD&A), risk factor updates, and key quarterly financial data such as revenue and net income extracted from XBRL.
Microsoft Corporation Q4 2025 10-Q Analysis
Management Discussion & Analysis
- • Revenue $81.3B, up 17% YoY (+$11.6B) driven by Intelligent Cloud +29% and Productivity & Business Processes +16%, offset by More Personal Computing -3%
- • Operating margin 47.1% ($38.3B operating income) vs 45.5% ($31.7B) YoY, reflecting 21% operating income growth but slight gross margin % decrease in Microsoft Cloud to 67%
- • Best segment: Intelligent Cloud revenue +29% to $32.9B with operating income +28% to $13.9B; Worst: More Personal Computing revenue -3% to $14.3B with operating income -3% to $3.8B, hurt by gaming declines
- • Cash equivalents & short-term investments decreased to $89.5B from $94.6B; operating cash flow up $24.3B to $80.8B for six months; capital expenditures up $18.5B reflecting AI infrastructure investment
- • Management highlights AI and cloud investments increasing operating costs and slightly pressuring margins; expects continued growth in AI demand; raised $7.6B net gain from OpenAI investment boosts net income impact; foresees ongoing supply chain and competitive challenges
Risk Factors
- • New cybersecurity risk from November 2023 nation-state password spray attack compromising Microsoft email and source code repositories
- • Updated AI regulatory risk: EU’s AI Act may increase costs and restrict AI service operations in Europe due to evolving AI-specific laws
- • Legal risk: IRS audit with proposed $28.9B tax adjustment plus penalties related to intercompany transfer pricing disputes dating 2004–2013
- • Operational risk: Supply chain constrained by limited suppliers for datacenter and device components; impacted by geopolitical and environmental factors
- • Financial risk: Investment portfolio exposed to U.S. government credit rating downgrades and market downturns affecting fair value and impairment charges
Microsoft Corporation Q4 2025 Quarterly FinancialsXBRL
Revenue
$81.3B
▲ +16.7% YoY▲ +4.6% QoQ
Net Income
$38.5B
▲ +59.5% YoY▲ +38.6% QoQ
Gross Margin
68.0%
▼ -66bp YoY▼ -101bp QoQ
Operating Margin
47.1%
▲ +164bp YoY▼ -178bp QoQ
Net Margin
47.3%
▲ +1270bp YoY▲ +1160bp QoQ
ROE
9.8%
▲ +187bp YoY
Total Assets
$665.3B
▲ +24.6% YoY
EPS (Diluted)
$5.15
▲ +59.4% YoY▲ +38.4% QoQ
Operating Cash Flow
$35.8B
▲ +60.4% YoY▼ -20.6% QoQ
Source: XBRL data from Microsoft Corporation Q4 2025 10-Q filing on SEC EDGAR. All figures in USD.
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