Common-Size Income Statement
Quarterly Data
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- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
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Microsoft Corp., common-size consolidated income statement (quarterly data)
Based on: 10-K (reporting date: 2026-06-30), 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).
A significant structural transition in revenue composition is evident over the analyzed period. There is a consistent migration from product-based revenue to service and other revenue streams, reflecting a strategic shift in the business model.
- Revenue Mix Transformation
- Product revenue as a percentage of total revenue declined steadily from 42.53% in September 2020 to 19.15% by June 2026. Conversely, service and other revenue grew from 57.47% to 80.85% over the same period, establishing services as the primary driver of top-line growth.
- Gross Margin Stability
- Despite the shift in revenue mix, gross margins remained resilient, generally fluctuating between 67% and 71%. While the cost of revenue for services increased as a percentage of total revenue—rising from approximately 20% to nearly 30%—this was partially offset by the diminishing weight of product costs, which fell from roughly 10% to 3% of total revenue.
- Operating Expense Efficiency
- Operating expenses as a percentage of revenue show a general downward trend, indicating improved operational leverage. Research and development expenses decreased from a peak of 13.26% to 11.11%. Sales and marketing expenses also saw a notable decline, moving from 11.39% in September 2020 to 8.44% by June 2026. General and administrative costs remained relatively stable, typically hovering between 2.3% and 3.5%.
- Operating and Net Profitability
- Operating income margins expanded over the period, rising from 42.73% in September 2020 to 45.11% in June 2026, with a peak of 48.87% in September 2025. Net income margins followed a similar positive trajectory, moving from 37.39% to 39.74%. A significant anomaly occurred in December 2025, where net income surged to 47.32% due to a spike in other income, which reached 12.27% of revenue for that specific quarter.
The overall financial trajectory indicates a successful transition to a service-dominant model characterized by expanding operating margins and increased efficiency in sales and marketing expenditures.