Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Microsoft Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Jun 30, 2026	Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Net income	133,749)	101,832)	88,136)	72,361)	72,738)	61,271)
Depreciation, amortization, and other	38,534)	34,153)	22,287)	13,861)	14,460)	11,686)
Stock-based compensation expense	12,405)	11,974)	10,734)	9,611)	7,502)	6,118)
Net recognized (gains) losses on investments and derivatives	(11,047)	609)	305)	196)	(409)	(1,249)
Deferred income taxes	14,189)	(7,056)	(4,738)	(6,059)	(5,702)	(150)
Accounts receivable	(12,737)	(10,581)	(7,191)	(4,087)	(6,834)	(6,481)
Inventories	(461)	309)	1,284)	1,242)	(1,123)	(737)
Other current assets	(2,627)	(3,044)	(1,648)	(1,991)	(709)	(932)
Other long-term assets	(3,964)	(2,950)	(6,817)	(2,833)	(2,805)	(3,459)
Accounts payable	5,268)	569)	3,545)	(2,721)	2,943)	2,798)
Unearned revenue	9,361)	5,438)	5,348)	5,535)	5,109)	4,633)
Income taxes	(1,875)	(38)	1,687)	(358)	696)	(2,309)
Other current liabilities	6,847)	5,922)	4,867)	2,272)	2,344)	4,149)
Other long-term liabilities	(4,707)	(975)	749)	553)	825)	1,402)
Changes in operating assets and liabilities	(4,895)	(5,350)	1,824)	(2,388)	446)	(936)
Adjustments to reconcile net income to net cash from operations	49,186)	34,330)	30,412)	15,221)	16,297)	15,469)
Net cash from operations	182,935)	136,162)	118,548)	87,582)	89,035)	76,740)
Proceeds from issuance (repayments) of debt, maturities of 90 days or less, net	—)	(5,746)	5,250)	—)	—)	—)
Proceeds from issuance of debt	—)	—)	24,395)	—)	—)	—)
Cash premium on debt exchange	—)	—)	—)	—)	—)	(1,754)
Repayments of debt	(3,000)	(3,216)	(29,070)	(2,750)	(9,023)	(3,750)
Common stock issued	2,009)	2,056)	2,002)	1,866)	1,841)	1,693)
Common stock repurchased	(22,271)	(18,420)	(17,254)	(22,245)	(32,696)	(27,385)
Common stock cash dividends paid	(26,445)	(24,082)	(21,771)	(19,800)	(18,135)	(16,521)
Other, net	(2,839)	(2,291)	(1,309)	(1,006)	(863)	(769)
Net cash used in financing	(52,546)	(51,699)	(37,757)	(43,935)	(58,876)	(48,486)
Additions to property and equipment	(115,948)	(64,551)	(44,477)	(28,107)	(23,886)	(20,622)
Acquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets	(1,743)	(5,978)	(69,132)	(1,670)	(22,038)	(8,909)
Purchases of investments	(58,351)	(29,775)	(17,732)	(37,651)	(26,456)	(62,924)
Maturities of investments	34,605)	16,079)	24,775)	33,510)	16,451)	51,792)
Sales of investments	21,798)	9,309)	10,894)	14,354)	28,443)	14,008)
Other, net	(19,861)	2,317)	(1,298)	(3,116)	(2,825)	(922)
Net cash used in investing	(139,500)	(72,599)	(96,970)	(22,680)	(30,311)	(27,577)
Effect of foreign exchange rates on cash and cash equivalents	(196)	63)	(210)	(194)	(141)	(29)
Net change in cash and cash equivalents	(9,307)	11,927)	(16,389)	20,773)	(293)	648)
Cash and cash equivalents, beginning of period	30,242)	18,315)	34,704)	13,931)	14,224)	13,576)
Cash and cash equivalents, end of period	20,935)	30,242)	18,315)	34,704)	13,931)	14,224)

Based on: 10-K (reporting date: 2026-06-30), 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30).

The financial data reveals a period of substantial expansion in operational cash generation and a simultaneous, aggressive acceleration in capital expenditures. Net cash from operations exhibits a consistent growth trajectory, rising from 76.7 billion in 2021 to 182.9 billion by 2026, supported by a steady increase in net income, which more than doubled over the same period.

Operating Cash Flow Dynamics: A strong correlation exists between the growth of net income and net cash from operations. Non-cash adjustments, specifically depreciation, amortization, and other expenses, show a significant upward trend, increasing from 11.7 billion in 2021 to 38.5 billion in 2026. This suggests a massive increase in the underlying asset base. Stock-based compensation has also risen steadily, peaking at 12.4 billion in 2026, acting as a consistent non-cash add-back to operational cash flow.
Investing Activities and Capital Allocation: The most prominent trend is the exponential increase in additions to property and equipment, which grew from 20.6 billion in 2021 to 115.9 billion in 2026. This represents a strategic pivot toward heavy infrastructure investment. Additionally, a significant liquidity event occurred in 2024, with 69.1 billion utilized for the acquisition of companies. Investment activities are further characterized by high volatility in the purchase and sale of investments, though the overall trend remains focused on long-term asset accumulation.
Financing and Shareholder Returns: Financing activities are characterized by a consistent commitment to shareholder returns. Common stock cash dividends have grown linearly from 16.5 billion in 2021 to 26.4 billion in 2026. Share repurchases remain a primary mechanism for capital return, although the volume fluctuated, ranging from a high of 32.7 billion in 2022 to a low of 17.3 billion in 2024. Debt management appears strategic, with a notable issuance of 24.4 billion in 2024 to likely offset acquisition costs and CapEx demands.

The net change in cash and cash equivalents exhibits significant volatility, reflecting the timing of large-scale investments and acquisitions. Despite the massive increase in capital outflows for property and equipment, the company maintains a healthy cash position, ending 2026 with 20.9 billion in cash and cash equivalents. The overall financial profile indicates a transition toward an extremely capital-intensive growth phase, funded primarily by robust operational cash flows and strategic debt utilization.

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Microsoft Corp. (NASDAQ:MSFT)

Cash Flow Statement