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
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).
The financial data reveals a significant expansion in total revenue, which grew from 37,154 million US dollars in September 2020 to 90,007 million US dollars by June 2026. This growth is characterized by a fundamental structural shift in the revenue mix, moving from a balanced distribution between product and service streams toward an overwhelming reliance on services and other revenue.
- Revenue Stream Diversification
- Product revenue remained relatively stagnant over the analyzed period, fluctuating between approximately 13,000 million and 20,000 million US dollars. Conversely, service and other revenue exhibited aggressive and consistent growth, increasing from 21,351 million US dollars in September 2020 to 72,773 million US dollars in June 2026. This transition indicates a successful pivot toward recurring service-based income.
- Gross Profitability and Cost Structure
- Gross margin expanded from 26,152 million US dollars to 60,482 million US dollars. While the cost of revenue increased in absolute terms—driven primarily by the scaling of service operations—the overall gross margin continued to climb, reflecting the scalability of the service-centric model.
- Operating Expense Trends
- Operational expenditures showed a steady upward trajectory to support growth. Research and development expenses nearly doubled, rising from 4,926 million US dollars to 9,997 million US dollars. Sales and marketing expenses also increased, though they exhibited more volatility, ending at 7,595 million US dollars. General and administrative costs grew more modestly, moving from 1,119 million US dollars to 2,287 million US dollars, suggesting a level of efficiency in corporate overhead management as the business scaled.
- Operating Income and Bottom-Line Performance
- Operating income grew consistently from 15,876 million US dollars in September 2020 to 40,603 million US dollars in June 2026. Net income followed a similar growth path, starting at 13,893 million US dollars and reaching 35,766 million US dollars. A notable anomaly occurred in December 2025, where net income spiked to 38,458 million US dollars, driven by a substantial increase in other income, net, which reached 9,971 million US dollars for that quarter.
The overall financial trajectory is one of robust scaling and successful business model evolution. The ability to increase operating income at a rate that outpaces the growth of general and administrative expenses underscores strong operational leverage.
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