16.7%
Revenue Growth Drivers
Microsoft's revenue increased by 16.7% year-over-year, driven by strong demand in cloud services and software products.
Source: Source: 10-Q Income Statement, p.1
AI Takeaway
In Q2 FY2026, Microsoft reported strong financial performance with a 16.7% increase in revenue and a 59.5% rise in net income, driven by robust operating income growth and effective cost management.
Revenue
$81.27B
++16.72% YoY
EPS (Basic)
$5.18
++59.88% YoY
Gross Margin
68.0%
-0.66% YoY
Operating Income
$38.27B
++20.92% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Microsoft's revenue increased by 16.7% year-over-year, driven by strong demand in cloud services and software products.
Source: Source: 10-Q Income Statement, p.1
Operating income rose by 20.9% due to increased efficiency and cost management, despite a 19.2% rise in cost of revenue.
Source: Source: 10-Q Income Statement, p.1
Operating cash flow increased by 60.4%, reflecting improved cash generation from core operations.
Source: Source: 10-Q Cash Flow, p.1
Intense competition in cloud services could impact Microsoft's market share and pricing power.
Source: Source: Industry Analysis
Unlock 2 more detailed risk analysis
Upgrade to unlockReported EPS of $4.14 versus the $4.03 analyst consensus — a +2.6% beat for Q2 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $81.27B | $69.63B | +16.72% |
Cost of Revenue | $25.98B | $21.8B | +19.17% |
Gross Profit | $55.3B | $47.83B | +15.60% |
Operating Income | $38.27B | $31.65B | +20.92% |
Net Income | $38.46B | $24.11B | +59.52% |
EPS (Basic) | $5.18 | $3.24 | +59.88% |
EPS (Diluted) | $5.16 | $3.23 | +59.75% |
R&D Expense | $8.5B | $7.92B | +7.41% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $665.3B | $533.9B | +24.61% |
Current Assets | $180.19B | $147.08B | +22.51% |
Total Liabilities | $274.43B | $231.2B | +18.70% |
Current Liabilities | $130B | $108.88B | +19.40% |
Stockholders' Equity | $390.88B | $302.69B | +29.13% |
Cash & Equivalents | $24.3B | $17.48B | +38.98% |
Long-Term Debt | $40.26B | $44.97B | -10.47% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $35.76B | $22.29B | +60.41% |
Investing Cash Flow | $-22.7B | $-14.11B | -60.89% |
Financing Cash Flow | $-17.62B | $-11.24B | -56.69% |
Share Buybacks | $7.42B | $4.99B | +48.72% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 68.0% | 68.7% | -0.66% |
Operating Margin | 47.1% | 45.5% | +1.64% |
Net Margin | 47.3% | — | — |
ROE | 9.8% | — | — |
ROA | 5.8% | — | — |
Current Ratio | $1.386 | — | — |
Debt to Equity | $0.702 | — | — |
Other companies in Systems Software
Microsoft's Q2 FY2026 earnings showed a significant increase in net income by 59.5% to $38.46 billion, indicating strong performance, but specific estimates are not provided in the filing.
Key takeaways include a 16.7% increase in revenue to $81.27 billion and a 59.5% rise in net income, driven by strong cloud services demand and operational efficiency.
Microsoft's revenue grew by 16.7% year-over-year to $81.27 billion, primarily due to increased demand for its cloud services and software products.
Microsoft's financial health is strong, with a 24.6% increase in total assets and a robust current ratio of 1.39, indicating good liquidity.
Key risks include competition in cloud services, regulatory challenges, and foreign exchange fluctuations, which could impact future performance.