Stock Analysis on Net
Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

Income Statement 
Quarterly Data

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Microsoft Corp., consolidated income statement (quarterly data)

US$ in millions

Microsoft Excel
3 months ended: 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 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Sep 30, 2018
Product 15,319 16,219 15,272 13,217 17,080 18,941 15,535 16,853 15,588 16,517 15,741 17,956 17,366 20,779 16,631 18,938 16,873 19,460 15,803 18,147 15,871 18,255 15,768 17,103 15,448 16,219 17,299
Service and other 54,747 53,413 50,313 51,510 44,778 43,079 40,982 39,336 37,269 36,230 34,381 33,909 31,994 30,949 28,686 27,214 24,833 23,616 21,351 19,886 19,150 18,651 17,287 16,614 15,123 16,252 11,785
Revenue 70,066 69,632 65,585 64,727 61,858 62,020 56,517 56,189 52,857 52,747 50,122 51,865 49,360 51,728 45,317 46,152 41,706 43,076 37,154 38,033 35,021 36,906 33,055 33,717 30,571 32,471 29,084
Product (3,037) (3,856) (3,294) (1,438) (4,339) (5,964) (3,531) (3,871) (3,941) (5,690) (4,302) (4,357) (4,584) (6,331) (3,792) (4,287) (4,277) (6,058) (3,597) (4,370) (3,376) (4,966) (3,305) (3,298) (3,441) (5,885) (3,649)
Service and other (18,882) (17,943) (16,805) (18,246) (14,166) (13,659) (12,771) (12,924) (12,187) (11,798) (11,150) (12,072) (11,031) (10,629) (9,854) (9,704) (8,768) (8,136) (7,405) (7,969) (7,599) (7,392) (7,101) (7,114) (6,729) (6,538) (6,256)
Cost of revenue (21,919) (21,799) (20,099) (19,684) (18,505) (19,623) (16,302) (16,795) (16,128) (17,488) (15,452) (16,429) (15,615) (16,960) (13,646) (13,991) (13,045) (14,194) (11,002) (12,339) (10,975) (12,358) (10,406) (10,412) (10,170) (12,423) (9,905)
Gross margin 48,147 47,833 45,486 45,043 43,353 42,397 40,215 39,394 36,729 35,259 34,670 35,436 33,745 34,768 31,671 32,161 28,661 28,882 26,152 25,694 24,046 24,548 22,649 23,305 20,401 20,048 19,179
Research and development (8,198) (7,917) (7,544) (8,056) (7,653) (7,142) (6,659) (6,739) (6,984) (6,844) (6,628) (6,849) (6,306) (5,758) (5,599) (5,687) (5,204) (4,899) (4,926) (5,214) (4,887) (4,603) (4,565) (4,513) (4,316) (4,070) (3,977)
Sales and marketing (6,212) (6,440) (5,717) (6,816) (6,207) (6,246) (5,187) (6,204) (5,750) (5,679) (5,126) (6,304) (5,595) (5,379) (4,547) (5,857) (5,082) (4,947) (4,231) (5,417) (4,911) (4,933) (4,337) (4,962) (4,565) (4,588) (4,098)
General and administrative (1,737) (1,823) (1,673) (2,246) (1,912) (1,977) (1,474) (2,197) (1,643) (2,337) (1,398) (1,749) (1,480) (1,384) (1,287) (1,522) (1,327) (1,139) (1,119) (1,656) (1,273) (1,121) (1,061) (1,425) (1,179) (1,132) (1,149)
Operating income 32,000 31,653 30,552 27,925 27,581 27,032 26,895 24,254 22,352 20,399 21,518 20,534 20,364 22,247 20,238 19,095 17,048 17,897 15,876 13,407 12,975 13,891 12,686 12,405 10,341 10,258 9,955
Other income (expense), net (623) (2,288) (283) (675) (854) (506) 389 473 321 (60) 54 (47) (174) 268 286 310 188 440 248 15 (132) 194 — 191 145 127 266
Income before income taxes 31,377 29,365 30,269 27,250 26,727 26,526 27,284 24,727 22,673 20,339 21,572 20,487 20,190 22,515 20,524 19,405 17,236 18,337 16,124 13,422 12,843 14,085 12,686 12,596 10,486 10,385 10,221
Provision for income taxes (5,553) (5,257) (5,602) (5,214) (4,788) (4,656) (4,993) (4,646) (4,374) (3,914) (4,016) (3,747) (3,462) (3,750) (19) (2,947) (1,779) (2,874) (2,231) (2,220) (2,091) (2,436) (2,008) 591 (1,677) (1,965) (1,397)
Net income 25,824 24,108 24,667 22,036 21,939 21,870 22,291 20,081 18,299 16,425 17,556 16,740 16,728 18,765 20,505 16,458 15,457 15,463 13,893 11,202 10,752 11,649 10,678 13,187 8,809 8,420 8,824

Based on: 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), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30).

Revenue Trends
Overall revenue demonstrated a consistent upward trend from September 30, 2018, through June 30, 2024. Revenue increased from approximately 29 billion US dollars to over 69 billion US dollars in this period. While fluctuations occurred quarterly, the long-term trajectory shows strengthening top-line growth, predominantly driven by steady increases in service and other revenues alongside fluctuating product revenues.
Product Revenue
Product revenue showed significant volatility with frequent declines and recoveries. Notably, after peaking near 20.7 billion US dollars in December 2021, product revenue trended downward in succeeding quarters, reaching lows around 13.2 billion US dollars by December 2024. This suggests challenges or shifts in the product segment, contrasting with the growing service revenues.
Service and Other Revenue
The service and other revenue component exhibited strong, consistent growth over the time frame. Beginning around 11.8 billion US dollars in late 2018, it almost quadrupled to over 54 billion US dollars by late 2024. This steady increase indicates a successful expansion or increased reliance on services contributing significantly to total revenue growth.
Cost of Revenue and Gross Margin
Costs of revenue showed parallel growth alongside revenue increases, rising from roughly 9.9 billion US dollars in September 2018 to over 21.9 billion US dollars by December 2024. Despite rising costs, gross margin also expanded from approximately 19.2 billion US dollars to about 48.1 billion US dollars, reflecting improved profitability and possibly enhanced operational efficiencies or better product mix.
Operating Expenses
Research and development expenses steadily increased from approximately 4.0 billion US dollars to over 8.1 billion US dollars, indicating consistent investment in innovation and product development. Sales and marketing expenses also showed a rising pattern, increasing from roughly 4.1 billion US dollars to above 6.2 billion US dollars, reflecting efforts to support growth and market penetration. General and administrative expenses exhibited more variability but tended upward, growing from about 1.1 billion US dollars to nearly 1.7 billion US dollars, possibly due to scaling operations.
Operating Income
Operating income generally increased, rising from nearly 10.0 billion US dollars in late 2018 to a peak of around 32.0 billion US dollars by early 2025, despite some short-term fluctuations. This rise corresponds with revenue growth and expanding gross margins, suggesting improved core business profitability.
Other Income (Expense), Net
This item showed irregular patterns with positive and negative values across periods, including significant negative values in later quarters nearing 2024 and 2025. The volatility here implies impacts from non-operating activities and financial items that affect pre-tax income unpredictably.
Income Before Taxes and Provision for Income Taxes
Income before income taxes generally followed operating income, increasing from about 10.2 billion US dollars to over 31 billion US dollars. The provision for income taxes was consistently a significant outflow, fluctuating between small negative and large negative values, indicating variability in tax expense and possibly changing tax policies or effective rates over time.
Net Income
Net income grew substantially from around 8.8 billion US dollars in late 2018 to approximately 25.8 billion US dollars by early 2025. This increase reflects the combined effects of rising revenues, expanding margins, and effective expense management despite fluctuating tax provisions and other income items.
Summary
The financial data indicate robust growth primarily driven by the service and other revenue segment, with product revenue showing volatility and decline in recent periods. Operational efficiency appears to have improved, evidenced by widening gross margins and increasing operating income. Sustained investments in research and development and sales efforts support the growth trend but come with increasing expenses. Despite some variability in non-operating income and tax expenses, net income showed a strong upward trend, signaling overall financial health and profitability growth over the reported periods.