Stock Analysis on Net
Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

$24.99

Common-Size Income Statement
Quarterly Data

Paying user area

Try for free

Microsoft Corp. pages available for free this week:

The data is hidden behind: . Unhide it.

Get access

This is a one-time payment. There is no automatic renewal.

We accept:

Visa Mastercard American Express Maestro Discover JCB PayPal Google Pay
Visa Secure Mastercard Identity Check American Express SafeKey

Microsoft Corp., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019
Product
Service and other
Revenue
Product
Service and other
Cost of revenue
Gross margin
Research and development
Sales and marketing
General and administrative
Operating income
Other income (expense), net
Income before income taxes
Provision for income taxes
Net income

Based on: 10-Q (reporting date: 2026-03-31), 10-Q (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-K (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-Q (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-K (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-Q (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-K (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30).

Analysis of the common-size income statement reveals a fundamental structural shift in the revenue model and a consistent expansion in operational profitability over the observed period.

Revenue Composition
A profound transition from product-centric to service-centric revenue is evident. Product revenue as a percentage of total revenue declined steadily from 47.70% in September 2019 to 18.20% by March 2026. Simultaneously, Service and other revenue increased from 52.30% to 81.80% over the same period, indicating a successful pivot toward a service-dominant business model.
Gross Margin Stability
Gross margins have remained relatively stable, generally fluctuating between 66% and 71%. The cost of revenue has consistently hovered between 29% and 33%, with the gross margin ending at 67.63% in March 2026. This stability suggests that the shift toward services has not significantly eroded the overall cost structure relative to revenue.
Operating Expense Efficiency
There is a visible trend of improving operational efficiency. Sales and marketing expenses as a percentage of revenue decreased from approximately 13-14% in 2019 to 8.22% by March 2026. Research and development spending also showed a gradual decline from 13.81% to 10.76%. General and administrative expenses remained consistently low, typically fluctuating between 2.3% and 4.4% of revenue.
Profitability and Bottom-Line Trends
Operating income margins expanded significantly, rising from 38.38% in September 2019 to 46.33% in March 2026, with a peak of 48.87% recorded in September 2025. Net income margins followed a similar upward trajectory, moving from a range of 29-32% in the early periods to 38.34% by March 2026. A notable volatility is observed in the other income (expense) line, specifically in December 2025, where a spike to 12.27% of revenue contributed to a peak net income margin of 47.32%.