Net Profit Margin
since 2005
Calculation
Microsoft Corp., net profit margin, long-term trends, calculation
| Net profit margin | = | 100 | × | Net income1 | ÷ | Revenue1 | |
|---|---|---|---|---|---|---|---|
| Jun 30, 2026 | 40.31% | = | 100 | × | 133,749) | ÷ | 331,839) |
| Jun 30, 2025 | 36.15% | = | 100 | × | 101,832) | ÷ | 281,724) |
| Jun 30, 2024 | 35.96% | = | 100 | × | 88,136) | ÷ | 245,122) |
| Jun 30, 2023 | 34.15% | = | 100 | × | 72,361) | ÷ | 211,915) |
| Jun 30, 2022 | 36.69% | = | 100 | × | 72,738) | ÷ | 198,270) |
| Jun 30, 2021 | 36.45% | = | 100 | × | 61,271) | ÷ | 168,088) |
| Jun 30, 2020 | 30.96% | = | 100 | × | 44,281) | ÷ | 143,015) |
| Jun 30, 2019 | 31.18% | = | 100 | × | 39,240) | ÷ | 125,843) |
| Jun 30, 2018 | 15.02% | = | 100 | × | 16,571) | ÷ | 110,360) |
| Jun 30, 2017 | 23.57% | = | 100 | × | 21,204) | ÷ | 89,950) |
| Jun 30, 2016 | 19.69% | = | 100 | × | 16,798) | ÷ | 85,320) |
| Jun 30, 2015 | 13.03% | = | 100 | × | 12,193) | ÷ | 93,580) |
| Jun 30, 2014 | 25.42% | = | 100 | × | 22,074) | ÷ | 86,833) |
| Jun 30, 2013 | 28.08% | = | 100 | × | 21,863) | ÷ | 77,849) |
| Jun 30, 2012 | 23.03% | = | 100 | × | 16,978) | ÷ | 73,723) |
| Jun 30, 2011 | 33.10% | = | 100 | × | 23,150) | ÷ | 69,943) |
| Jun 30, 2010 | 30.02% | = | 100 | × | 18,760) | ÷ | 62,484) |
| Jun 30, 2009 | 24.93% | = | 100 | × | 14,569) | ÷ | 58,437) |
| Jun 30, 2008 | 29.26% | = | 100 | × | 17,681) | ÷ | 60,420) |
| Jun 30, 2007 | 27.51% | = | 100 | × | 14,065) | ÷ | 51,122) |
| Jun 30, 2006 | 28.45% | = | 100 | × | 12,599) | ÷ | 44,282) |
| Jun 30, 2005 | 30.80% | = | 100 | × | 12,254) | ÷ | 39,788) |
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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
1 US$ in millions
The financial trajectory from 2005 to 2026 demonstrates a significant evolution in operational efficiency and profitability. While the company maintained a strong baseline of profitability in the early years, it experienced a period of notable margin compression before entering a phase of sustained expansion and record-high profit margins.
- Initial Stability and Moderate Fluctuation (2005–2011)
- During this period, net profit margins remained relatively stable, generally oscillating between 24.93% and 33.10%. The profitability showed a consistent ability to convert revenue into net income, peaking in 2011 at 33.10% as revenue climbed from approximately 39.8 billion to 69.9 billion US dollars.
- Period of Margin Compression and Volatility (2012–2018)
- A period of instability is observed starting in 2012, characterized by significant downward pressure on profit margins. The net profit margin reached a historical low of 13.03% in 2015 and experienced another sharp decline to 15.02% in 2018. This era was marked by a disconnect between revenue growth and net income retention, suggesting higher operational costs or significant one-time write-downs during these intervals.
- Sustained Margin Expansion (2019–2026)
- From 2019 onward, a decisive upward trend in profitability is evident. Net profit margins recovered sharply to 31.18% in 2019 and have since maintained a trajectory of growth, surpassing 35% consistently from 2020 through 2026. The period culminates in a peak margin of 40.31% by 2026, indicating an optimized cost structure and high-value revenue streams.
The correlation between revenue and net income has strengthened significantly in the latter half of the analyzed timeframe. While revenue growth was steady throughout the two decades, the acceleration of net income from 2019—rising from 39.2 billion to 133.7 billion US dollars—highlights a transition toward a highly scalable business model with increasing returns on each dollar of revenue generated.
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Comparison to Competitors
Microsoft Corp., net profit margin, long-term trends, comparison to competitors
| Microsoft Corp. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Jun 30, 2026 | 40.31% | — | — | — | — | -3.38% | — | — | — | 25.37% | — | — | 17.96% | — | — | 7.26% |
| Jun 30, 2025 | 36.15% | 11.02% | 30.00% | 60.83% | 20.94% | -0.49% | 3.14% | 15.69% | 20.55% | 21.68% | 36.31% | 12.30% | 16.35% | 13.16% | 18.89% | 6.23% |
| Jun 30, 2024 | 35.96% | 11.19% | 25.85% | 33.55% | 22.74% | 2.92% | 6.85% | 9.60% | 18.19% | 19.76% | 16.13% | 32.11% | 11.87% | 12.97% | 36.94% | 19.02% |
| Jun 30, 2023 | 34.15% | 10.72% | 27.97% | 10.87% | 25.46% | -8.18% | 2.28% | 12.13% | 16.59% | 17.02% | 9.43% | 6.38% | 0.66% | 19.30% | 21.05% | -5.90% |
| Jun 30, 2022 | 36.69% | 11.17% | 27.01% | -6.84% | 23.84% | -16.18% | -2.99% | 2.71% | 16.23% | 15.83% | -19.61% | -4.85% | 5.45% | 4.49% | 19.38% | 0.57% |
| Jun 30, 2021 | 36.45% | 11.69% | 30.55% | 1.27% | 23.29% | -10.59% | -2.02% | 10.01% | 21.41% | 33.96% | -33.75% | -11.72% | 19.16% | 3.90% | 18.02% | -6.54% |
| Jun 30, 2020 | 30.96% | 11.52% | 40.88% | — | 22.02% | -29.45% | -4.07% | 7.59% | 23.78% | 25.94% | -106.75% | -7.83% | 0.74% | 2.62% | 18.03% | -13.25% |
| Jun 30, 2019 | 31.18% | 11.06% | 26.42% | — | 42.33% | — | -4.61% | 12.22% | 22.95% | 28.05% | — | -2.82% | 8.36% | 18.11% | 15.84% | -14.82% |
| Jun 30, 2018 | 15.02% | 9.76% | 28.69% | — | 16.17% | — | — | 10.97% | 20.31% | 9.60% | — | -6.51% | 1.22% | -1.02% | 13.86% | -14.99% |
| Jun 30, 2017 | 23.57% | 9.37% | 23.20% | — | 10.50% | — | — | 7.27% | 18.76% | 24.74% | — | -12.30% | 2.14% | -7.71% | 5.01% | -26.01% |
| Jun 30, 2016 | 19.69% | 11.82% | 19.96% | — | 11.18% | — | — | 14.86% | 20.86% | 24.03% | — | -16.39% | -0.71% | -32.49% | 11.01% | -24.94% |
| Jun 30, 2015 | 13.03% | 9.28% | 13.13% | — | 14.83% | — | — | 16.14% | 8.71% | 26.00% | — | -17.78% | -4.89% | -19.73% | 10.08% | -31.48% |
| Jun 30, 2014 | 25.42% | 9.23% | 6.47% | — | 10.05% | — | — | 12.96% | 20.13% | 28.62% | — | -37.86% | -5.70% | -26.28% | 12.59% | -36.79% |
| Jun 30, 2013 | 28.08% | 10.80% | 7.15% | — | 11.25% | — | — | 16.52% | 20.57% | 29.38% | — | -7.38% | -8.87% | -17.36% | 12.63% | -43.55% |
| Jun 30, 2012 | 23.03% | 8.58% | 18.91% | — | 33.17% | — | — | 15.89% | 19.08% | 26.89% | — | 0.29% | -0.51% | -15.32% | 10.39% | — |
| Jun 30, 2011 | 33.10% | 8.33% | 19.75% | — | 6.28% | — | — | 14.83% | 16.46% | 23.99% | — | — | 3.89% | — | 14.42% | — |
| Jun 30, 2010 | 30.02% | 7.71% | 20.39% | — | 13.52% | — | — | 14.85% | 16.61% | 22.87% | — | — | 6.18% | — | 17.17% | — |
| Jun 30, 2009 | 24.93% | 6.86% | 13.12% | — | -17.58% | — | — | 14.02% | 14.05% | 24.05% | — | — | 4.03% | — | 12.33% | — |
| Jun 30, 2008 | 29.26% | 6.68% | 24.35% | — | -178.51% | — | — | 11.90% | 15.52% | 24.61% | — | — | 2.45% | — | 14.21% | — |
| Jun 30, 2007 | 27.51% | 5.79% | 22.92% | — | 18.34% | — | — | 10.55% | 16.46% | 23.75% | — | — | 0.10% | — | 10.76% | — |
| Jun 30, 2006 | 28.45% | 5.34% | 19.64% | — | 9.61% | — | — | 10.38% | 17.80% | 23.51% | — | — | 9.19% | — | 2.26% | — |
| Jun 30, 2005 | 30.80% | 5.50% | 30.66% | — | 3.71% | — | — | 8.71% | 18.73% | 24.46% | — | — | 4.16% | — | -1.56% | — |
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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Sector (Software & Services)
Microsoft Corp., net profit margin, long-term trends, comparison to sector (software & services)
| Microsoft Corp. | Software & Services | |
|---|---|---|
| Jun 30, 2026 | 40.31% | — |
| Jun 30, 2025 | 36.15% | 26.02% |
| Jun 30, 2024 | 35.96% | 24.71% |
| Jun 30, 2023 | 34.15% | 21.78% |
| Jun 30, 2022 | 36.69% | 21.43% |
| Jun 30, 2021 | 36.45% | 25.04% |
| Jun 30, 2020 | 30.96% | 20.02% |
| Jun 30, 2019 | 31.18% | 21.61% |
| Jun 30, 2018 | 15.02% | 12.10% |
| Jun 30, 2017 | 23.57% | 15.36% |
| Jun 30, 2016 | 19.69% | 16.49% |
| Jun 30, 2015 | 13.03% | 14.57% |
| Jun 30, 2014 | 25.42% | 18.21% |
| Jun 30, 2013 | 28.08% | 20.55% |
| Jun 30, 2012 | 23.03% | 18.62% |
| Jun 30, 2011 | 33.10% | 20.48% |
| Jun 30, 2010 | 30.02% | 19.41% |
| Jun 30, 2009 | 24.93% | 17.17% |
| Jun 30, 2008 | 29.26% | 16.67% |
| Jun 30, 2007 | 27.51% | 15.91% |
| Jun 30, 2006 | 28.45% | 15.65% |
| Jun 30, 2005 | 30.80% | 15.06% |
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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).
Comparison to Industry (Information Technology)
Microsoft Corp., net profit margin, long-term trends, comparison to industry (information technology)
| Microsoft Corp. | Information Technology | |
|---|---|---|
| Jun 30, 2026 | 40.31% | — |
| Jun 30, 2025 | 36.15% | 25.74% |
| Jun 30, 2024 | 35.96% | 20.58% |
| Jun 30, 2023 | 34.15% | 20.29% |
| Jun 30, 2022 | 36.69% | 22.34% |
| Jun 30, 2021 | 36.45% | 23.54% |
| Jun 30, 2020 | 30.96% | 19.63% |
| Jun 30, 2019 | 31.18% | 19.81% |
| Jun 30, 2018 | 15.02% | 18.58% |
| Jun 30, 2017 | 23.57% | 17.82% |
| Jun 30, 2016 | 19.69% | 17.77% |
| Jun 30, 2015 | 13.03% | 18.35% |
| Jun 30, 2014 | 25.42% | 19.38% |
| Jun 30, 2013 | 28.08% | 20.21% |
| Jun 30, 2012 | 23.03% | 20.08% |
| Jun 30, 2011 | 33.10% | 20.68% |
| Jun 30, 2010 | 30.02% | 20.24% |
| Jun 30, 2009 | 24.93% | 14.53% |
| Jun 30, 2008 | 29.26% | 15.21% |
| Jun 30, 2007 | 27.51% | 15.81% |
| Jun 30, 2006 | 28.45% | 16.24% |
| Jun 30, 2005 | 30.80% | 16.66% |
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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30), 10-K (reporting date: 2012-06-30), 10-K (reporting date: 2011-06-30), 10-K (reporting date: 2010-06-30), 10-K (reporting date: 2009-06-30), 10-K (reporting date: 2008-06-30), 10-K (reporting date: 2007-06-30), 10-K (reporting date: 2006-06-30), 10-K (reporting date: 2005-06-30).