Microsoft Corp Financials
Financial Health Signals
Based on FY2025 annual data. Scores normalized against common benchmarks. How we calculate these scores
Microsoft Corp has an operating margin of 45.6%, meaning the company retains $46 of operating profit per $100 of revenue. This strong profitability earns a score of 100/100, reflecting efficient cost management and pricing power. This is up from 44.6% the prior year.
Microsoft Corp's revenue grew 14.9% year-over-year to $281.7B, a solid pace of expansion. This earns a growth score of 71/100.
Microsoft Corp carries a low D/E ratio of 0.12, meaning only $0.12 of long-term debt for every $1 of shareholders' equity. This conservative leverage earns a score of 100/100, indicating a strong balance sheet with room for future borrowing.
Microsoft Corp's current ratio of 1.35 indicates adequate short-term liquidity, earning a score of 34/100. The company can meet its near-term obligations, though with limited headroom.
Microsoft Corp converts 25.4% of revenue into free cash flow ($71.6B). This strong cash generation earns a score of 100/100.
Microsoft Corp earns a strong 29.6% return on equity (ROE), meaning it generates $30 of profit for every $100 of shareholders' equity. This efficient capital use earns a returns score of 100/100. This is down from 32.8% the prior year.
Microsoft Corp scores 8.26, well above the 2.99 safe threshold. The score is driven primarily by a large market capitalization ($3.0T) relative to total liabilities ($275.5B). This indicates low bankruptcy risk based on profitability, leverage, and asset efficiency.
Microsoft Corp passes 5 of 9 financial strength tests. 3 of 4 profitability signals pass, 2 of 3 leverage/liquidity signals pass, neither operating efficiency signal passes.
For every $1 of reported earnings, Microsoft Corp generates $1.34 in operating cash flow ($136.2B OCF vs $101.8B net income). This indicates profits are well-supported by actual cash generation, not accounting adjustments.
Microsoft Corp earns $53.9 in operating income for every $1 of interest expense ($128.5B vs $2.4B). This wide margin provides strong safety for debt servicing, even if earnings decline temporarily.
This page shows Microsoft Corp (MSFT) financial statements, including the income statement, balance sheet, cash flow statement, and key financial ratios. View 18 years of annual fundamentals and quarterly data, with year-over-year growth rates and compound annual growth rates (CAGR). All figures are derived from SEC filings (10-K and 10-Q reports).
Key Financial Metrics
Microsoft Corp generated $281.7B in revenue in fiscal year 2025. This represents an increase of 14.9% from the prior year.
Microsoft Corp's EBITDA was $159.9B in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization. This represents an increase of 21.9% from the prior year.
Microsoft Corp generated $71.6B in free cash flow in fiscal year 2025, representing cash available after capex. This represents a decrease of 3.3% from the prior year.
Microsoft Corp reported $101.8B in net income in fiscal year 2025. This represents an increase of 15.5% from the prior year.
Microsoft Corp earned $13.64 per diluted share (EPS) in fiscal year 2025. This represents an increase of 15.6% from the prior year.
Microsoft Corp held $30.2B in cash against $40.2B in long-term debt as of fiscal year 2025.
Microsoft Corp paid $3.32 per share in dividends in fiscal year 2025. This represents an increase of 10.7% from the prior year.
Microsoft Corp had 7.43B shares outstanding in fiscal year 2025. This represents an increase of 0.0% from the prior year.
Microsoft Corp's gross margin was 68.8% in fiscal year 2025, indicating the percentage of revenue retained after direct costs. This is down 0.9 percentage points from the prior year.
Microsoft Corp's operating margin was 45.6% in fiscal year 2025, reflecting core business profitability. This is up 1.0 percentage points from the prior year.
Microsoft Corp's net profit margin was 36.1% in fiscal year 2025, showing the share of revenue converted to profit. This is up 0.2 percentage points from the prior year.
Microsoft Corp's ROE was 29.6% in fiscal year 2025, measuring profit generated per dollar of shareholder equity. This is down 3.2 percentage points from the prior year.
Microsoft Corp invested $32.5B in research and development in fiscal year 2025. This represents an increase of 10.1% from the prior year.
Microsoft Corp spent $18.4B on share buybacks in fiscal year 2025, returning capital to shareholders by reducing shares outstanding. This represents an increase of 6.8% from the prior year.
Microsoft Corp invested $64.6B in capex in fiscal year 2025, funding long-term assets and infrastructure. This represents an increase of 45.1% from the prior year.
MSFT Income Statement
| Metric | Q2'25 | Q1'25 | Q3'25 | Q2'24 | Q1'24 | Q3'24 | Q2'23 | Q1'23 |
|---|---|---|---|---|---|---|---|---|
| Revenue | $81.3B+4.6% | $77.7B+10.9% | $70.1B+0.6% | $69.6B+6.2% | $65.6B+6.0% | $61.9B-0.3% | $62.0B+9.7% | $56.5B |
| Cost of Revenue | $26.0B+8.0% | $24.0B+9.7% | $21.9B+0.6% | $21.8B+8.5% | $20.1B+8.6% | $18.5B-5.7% | $19.6B+20.4% | $16.3B |
| Gross Profit | $55.3B+3.1% | $53.6B+11.4% | $48.1B+0.7% | $47.8B+5.2% | $45.5B+4.9% | $43.4B+2.3% | $42.4B+5.4% | $40.2B |
| R&D Expenses | $8.5B+4.4% | $8.1B-0.6% | $8.2B+3.5% | $7.9B+4.9% | $7.5B-1.4% | $7.7B+7.2% | $7.1B+7.3% | $6.7B |
| SG&A Expenses | $1.9B+7.0% | $1.8B+4.0% | $1.7B-4.7% | $1.8B+9.0% | $1.7B-12.5% | $1.9B-3.3% | $2.0B+34.1% | $1.5B |
| Operating Income | $38.3B+0.8% | $38.0B+18.6% | $32.0B+1.1% | $31.7B+3.6% | $30.6B+10.8% | $27.6B+2.0% | $27.0B+0.5% | $26.9B |
| Interest Expense | $736.0M+5.4% | $698.0M+17.5% | $594.0M0.0% | $594.0M+2.1% | $582.0M-27.3% | $800.0M-12.0% | $909.0M+73.1% | $525.0M |
| Income Tax | $9.8B+49.3% | $6.6B+18.0% | $5.6B+5.6% | $5.3B-6.2% | $5.6B+17.0% | $4.8B+2.8% | $4.7B-6.7% | $5.0B |
| Net Income | $38.5B+38.6% | $27.7B+7.4% | $25.8B+7.1% | $24.1B-2.3% | $24.7B+12.4% | $21.9B+0.3% | $21.9B-1.9% | $22.3B |
| EPS (Diluted) | $5.16+38.7% | $3.72+7.5% | $3.46+7.1% | $3.23-2.1% | $3.30+12.2% | $2.94+0.3% | $2.93-2.0% | $2.99 |
MSFT Balance Sheet
| Metric | Q2'25 | Q1'25 | Q3'25 | Q2'24 | Q1'24 | Q3'24 | Q2'23 | Q1'23 |
|---|---|---|---|---|---|---|---|---|
| Total Assets | $665.3B+4.5% | $636.4B+13.1% | $562.6B+5.4% | $533.9B+2.1% | $523.0B+8.0% | $484.3B+2.9% | $470.6B+5.6% | $445.8B |
| Current Assets | $180.2B-4.7% | $189.1B+20.7% | $156.6B+6.5% | $147.1B-1.9% | $149.9B+1.9% | $147.2B-0.1% | $147.4B-29.0% | $207.6B |
| Cash & Equivalents | $24.3B-15.8% | $28.8B+0.1% | $28.8B+64.9% | $17.5B-16.1% | $20.8B+6.1% | $19.6B+13.5% | $17.3B-78.5% | $80.5B |
| Inventory | $1.1B-6.3% | $1.1B+33.3% | $848.0M-6.7% | $909.0M-44.1% | $1.6B+24.7% | $1.3B-19.3% | $1.6B-46.2% | $3.0B |
| Accounts Receivable | $56.5B+6.9% | $52.9B+2.3% | $51.7B+7.3% | $48.2B+9.2% | $44.1B+0.3% | $44.0B+2.8% | $42.8B+15.9% | $37.0B |
| Goodwill | $119.6B+0.1% | $119.5B+0.1% | $119.3B+0.1% | $119.2B-0.2% | $119.4B+0.2% | $119.2B+0.2% | $118.9B+75.4% | $67.8B |
| Total Liabilities | $274.4B+0.4% | $273.3B+13.5% | $240.7B+4.1% | $231.2B-1.7% | $235.3B+1.8% | $231.1B-0.5% | $232.3B+3.2% | $225.1B |
| Current Liabilities | $130.0B-3.7% | $135.0B+18.2% | $114.2B+4.9% | $108.9B-5.5% | $115.2B-2.8% | $118.5B-2.1% | $121.0B-3.0% | $124.8B |
| Long-Term Debt | $35.4B+0.1% | $35.4B-11.3% | $39.9B+0.4% | $39.7B-7.3% | $42.9B+0.5% | $42.7B-5.1% | $44.9B+7.1% | $41.9B |
| Total Equity | $390.9B+7.7% | $363.1B+12.8% | $321.9B+6.3% | $302.7B+5.2% | $287.7B+13.7% | $253.2B+6.2% | $238.3B+8.0% | $220.7B |
| Retained Earnings | $280.8B+10.2% | $254.9B+16.0% | $219.8B+8.0% | $203.5B+7.7% | $188.9B+18.5% | $159.4B+9.4% | $145.7B+10.3% | $132.1B |
MSFT Cash Flow Statement
| Metric | Q2'25 | Q1'25 | Q3'25 | Q2'24 | Q1'24 | Q3'24 | Q2'23 | Q1'23 |
|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | $35.8B-20.6% | $45.1B+21.6% | $37.0B+66.2% | $22.3B-34.8% | $34.2B+7.1% | $31.9B+69.3% | $18.9B-38.4% | $30.6B |
| Capital Expenditures | $29.9B+54.0% | $19.4B+15.8% | $16.7B+6.0% | $15.8B+5.9% | $14.9B+36.3% | $11.0B+12.5% | $9.7B-1.8% | $9.9B |
| Free Cash Flow | $5.9B-77.1% | $25.7B+26.4% | $20.3B+212.9% | $6.5B-66.3% | $19.3B-8.1% | $21.0B+129.9% | $9.1B-55.9% | $20.7B |
| Investing Cash Flow | -$22.7B+34.3% | -$34.6B-171.8% | -$12.7B+9.9% | -$14.1B+7.2% | -$15.2B-42.1% | -$10.7B+85.1% | -$71.9B-14399.2% | $503.0M |
| Financing Cash Flow | -$17.6B-49.3% | -$11.8B+9.5% | -$13.0B-15.9% | -$11.2B+32.2% | -$16.6B+11.9% | -$18.8B-85.4% | -$10.1B-168.7% | $14.8B |
| Dividends Paid | $6.8B+9.6% | $6.2B0.0% | $6.2B0.0% | $6.2B+10.7% | $5.6B0.0% | $5.6B0.0% | $5.6B+10.4% | $5.1B |
| Share Buybacks | $7.4B+31.2% | $5.7B+18.2% | $4.8B-4.1% | $5.0B+21.4% | $4.1B-2.5% | $4.2B+5.3% | $4.0B-17.2% | $4.8B |
MSFT Financial Ratios
| Metric | Q2'25 | Q1'25 | Q3'25 | Q2'24 | Q1'24 | Q3'24 | Q2'23 | Q1'23 |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 68.0%-1.0pp | 69.0%+0.3pp | 68.7%+0.0pp | 68.7%-0.7pp | 69.3%-0.7pp | 70.1%+1.7pp | 68.4%-2.8pp | 71.2% |
| Operating Margin | 47.1%-1.8pp | 48.9%+3.2pp | 45.7%+0.2pp | 45.5%-1.1pp | 46.6%+2.0pp | 44.6%+1.0pp | 43.6%-4.0pp | 47.6% |
| Net Margin | 47.3%+11.6pp | 35.7%-1.1pp | 36.9%+2.2pp | 34.6%-3.0pp | 37.6%+2.1pp | 35.5%+0.2pp | 35.3%-4.2pp | 39.4% |
| Return on Equity | 9.8%+2.2pp | 7.6%-0.4pp | 8.0%+0.1pp | 8.0%-0.6pp | 8.6%-0.1pp | 8.7%-0.5pp | 9.2%-0.9pp | 10.1% |
| Return on Assets | 5.8%+1.4pp | 4.4%-0.2pp | 4.6%+0.1pp | 4.5%-0.2pp | 4.7%+0.2pp | 4.5%-0.1pp | 4.7%-0.4pp | 5.0% |
| Current Ratio | 1.39-0.0 | 1.40+0.0 | 1.37+0.0 | 1.35+0.0 | 1.30+0.1 | 1.24+0.0 | 1.22-0.4 | 1.66 |
| Debt-to-Equity | 0.090.0 | 0.10-0.0 | 0.120.0 | 0.13-0.0 | 0.15-0.0 | 0.17-0.0 | 0.190.0 | 0.19 |
| FCF Margin | 7.2%-25.8pp | 33.0%+4.1pp | 29.0%+19.7pp | 9.3%-20.0pp | 29.4%-4.5pp | 33.9%+19.2pp | 14.7%-21.9pp | 36.6% |
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Frequently Asked Questions
What is Microsoft Corp's annual revenue?
Microsoft Corp (MSFT) reported $281.7B in total revenue for fiscal year 2025. This represents a 14.9% change compared to the previous fiscal year. Revenue measures the total income earned from the company's primary business operations before any expenses are deducted.
How fast is Microsoft Corp's revenue growing?
Microsoft Corp (MSFT) revenue grew by 14.9% year-over-year, from $245.1B to $281.7B in fiscal year 2025.
Is Microsoft Corp profitable?
Yes, Microsoft Corp (MSFT) reported a net income of $101.8B in fiscal year 2025, with a net profit margin of 36.1%.
What is Microsoft Corp's earnings per share (EPS)?
Microsoft Corp (MSFT) reported diluted earnings per share of $13.64 for fiscal year 2025. This represents a 15.6% change compared to the previous fiscal year. EPS represents the portion of a company's net income allocated to each outstanding share of common stock and is widely used to evaluate profitability on a per-share basis.
What is Microsoft Corp's EBITDA?
Microsoft Corp (MSFT) had EBITDA of $159.9B in fiscal year 2025, measuring earnings before interest, taxes, depreciation, and amortization.
How much debt does Microsoft Corp have?
As of fiscal year 2025, Microsoft Corp (MSFT) had $30.2B in cash and equivalents against $40.2B in long-term debt.
What is Microsoft Corp's gross margin?
Microsoft Corp (MSFT) had a gross margin of 68.8% in fiscal year 2025, indicating the percentage of revenue retained after direct costs of goods sold.
What is Microsoft Corp's operating margin?
Microsoft Corp (MSFT) had an operating margin of 45.6% in fiscal year 2025, reflecting the profitability of core business operations before interest and taxes.
What is Microsoft Corp's net profit margin?
Microsoft Corp (MSFT) had a net profit margin of 36.1% in fiscal year 2025, representing the share of revenue converted into profit after all expenses.
Does Microsoft Corp pay dividends?
Yes, Microsoft Corp (MSFT) paid $3.32 per share in dividends during fiscal year 2025.
What is Microsoft Corp's return on equity (ROE)?
Microsoft Corp (MSFT) has a return on equity of 29.6% for fiscal year 2025, measuring how efficiently the company generates profit from shareholder equity.
What is Microsoft Corp's free cash flow?
Microsoft Corp (MSFT) generated $71.6B in free cash flow during fiscal year 2025. This represents a -3.3% change compared to the previous fiscal year. Free cash flow represents the cash a company generates after accounting for capital expenditures, and is widely used to assess financial flexibility and shareholder value.
What is Microsoft Corp's operating cash flow?
Microsoft Corp (MSFT) generated $136.2B in operating cash flow during fiscal year 2025, representing cash generated from core business activities.
What are Microsoft Corp's total assets?
Microsoft Corp (MSFT) had $619.0B in total assets as of fiscal year 2025, including both current and long-term assets.
What are Microsoft Corp's capital expenditures?
Microsoft Corp (MSFT) invested $64.6B in capital expenditures during fiscal year 2025, funding long-term assets and infrastructure.
How much does Microsoft Corp spend on research and development?
Microsoft Corp (MSFT) invested $32.5B in research and development during fiscal year 2025.
Does Microsoft Corp buy back shares?
Yes, Microsoft Corp (MSFT) spent $18.4B on share buybacks during fiscal year 2025, returning capital to shareholders by reducing shares outstanding.
How many shares does Microsoft Corp have outstanding?
Microsoft Corp (MSFT) had 7.43B shares outstanding as of fiscal year 2025.
What is Microsoft Corp's current ratio?
Microsoft Corp (MSFT) had a current ratio of 1.35 as of fiscal year 2025, which is considered adequate.
What is Microsoft Corp's debt-to-equity ratio?
Microsoft Corp (MSFT) had a debt-to-equity ratio of 0.12 as of fiscal year 2025, measuring the company's financial leverage by comparing total debt to shareholder equity.
What is Microsoft Corp's return on assets (ROA)?
Microsoft Corp (MSFT) had a return on assets of 16.4% for fiscal year 2025, measuring how efficiently the company uses its assets to generate profit.
What is Microsoft Corp's Altman Z-Score?
Microsoft Corp (MSFT) has an Altman Z-Score of 8.26, placing it in the Safe Zone (low bankruptcy risk). The Z-Score combines five financial ratios—working capital, retained earnings, EBIT, market capitalization, and revenue relative to total assets—to predict the likelihood of bankruptcy. Scores above 2.99 indicate financial safety while scores below 1.81 suggest financial distress. Learn more in our complete guide to financial health indicators.
What is Microsoft Corp's Piotroski F-Score?
Microsoft Corp (MSFT) has a Piotroski F-Score of 5 out of 9, indicating neutral financial health. The F-Score evaluates nine binary signals across profitability (positive ROA, positive cash flow, improving ROA, earnings quality), leverage (decreasing debt, improving liquidity, no share dilution), and operating efficiency (improving gross margin, improving asset turnover). Scores of 7–9 indicate strong and improving fundamentals. Learn more in our complete guide to financial health indicators.
Are Microsoft Corp's earnings high quality?
Microsoft Corp (MSFT) has an earnings quality ratio of 1.34x, considered cash-backed (high quality). This ratio compares operating cash flow to net income. A ratio above 1.0x means the company generates more cash than its reported earnings, indicating sustainable, cash-backed profits. Ratios below 1.0x suggest earnings rely on accounting accruals rather than actual cash generation. Learn more in our complete guide to financial health indicators.
Can Microsoft Corp cover its interest payments?
Microsoft Corp (MSFT) has an interest coverage ratio of 53.9x, meaning it can comfortably cover its interest obligations. This ratio divides operating income by interest expense. Ratios above 5x indicate strong debt-servicing ability, while ratios below 2x suggest the company may face difficulty meeting interest payments if earnings decline. Learn more in our complete guide to financial health indicators.
How financially healthy is Microsoft Corp?
Microsoft Corp (MSFT) scores 84 out of 100 on our Financial Profile, indicating strong overall financial health. This composite score evaluates six dimensions: profitability (operating margin), revenue growth, leverage (debt-to-equity), liquidity (current ratio), cash flow quality (free cash flow margin), and shareholder returns (return on equity). Each dimension is normalized against standard financial benchmarks. Learn more in our complete guide to financial health indicators.