Microsoft Corp. (NASDAQ:MSFT)

Gross Profit Margin

The gross profit margin remained relatively stable over the periods, fluctuating close to the high 60% range. It started around 68.27% and exhibited a gradual increase, peaking at approximately 69.89%. In later periods, it showed a minor decline but generally maintained a level near 68.7% to 69.4%. This consistency indicates effective cost management relative to revenues.

Operating Profit Margin

The operating profit margin demonstrated a clear upward trend overall. Beginning near 38.17%, it rose steadily, peaking at about 46.27% in the final period. The margin experienced minor short-term fluctuations but consistently improved, reflecting enhanced operational efficiency or better control over operating expenses.

Net Profit Margin

The net profit margin exhibited a notable increase during the earlier periods, reaching a high near 38.5%. Afterward, a gradual decline occurred, with values settling around 35.7% to 36.4% in the latest periods. Despite some volatility, the margins remained comparatively strong, suggesting stable profitability after all expenses and taxes.

Return on Equity (ROE)

The return on equity showed a peak early in the timeline, reaching above 44%, followed by a steady decline. Over time, ROE decreased substantially, nearing 28.9% by the end of the provided timeline. This reduction could imply increased equity base, reduced net income, or a combination of these factors, indicating changes in capital structure or profitability dynamics.

Return on Assets (ROA)

The return on assets increased initially from approximately 15.78% to over 21%, then declined moderately to around 16.5% in later periods. The upward trend in the first part reflects improved asset utilization or profitability, while the subsequent decrease suggests a weakening in asset efficiency or income generation relative to total assets.

Revenue Trends

Over the observed periods, revenue exhibits a clear upward trajectory. Starting from a value around 37,154 million US dollars in late 2020, revenue rises consistently, peaking near 77,673 million US dollars by the third quarter of 2025. There are minor fluctuations within quarters, but the overall pattern indicates sustained growth, with some accelerated increases especially notable from late 2022 onwards.

Gross Margin Behavior

Gross margin in absolute terms increases steadily over time, moving from approximately 26,152 million US dollars in late 2020 to about 53,630 million US dollars in the third quarter of 2025. This growth is largely proportional to the increase in revenue, signaling maintained operational scalability. The gross margin shows some seasonal variability but maintains a generally rising pattern consistent with revenue expansion.

Gross Profit Margin Percentage

The gross profit margin as a percentage remains relatively stable throughout the period, hovering around the high 60s percentile range. Early values near 68.3% gradually increase to a peak close to 69.9% by mid-2023, indicating a slight enhancement in cost efficiency or product mix over time. After this peak, the margin stabilizes slightly below 69%, showing consistency in profitability relative to sales despite large increases in revenue and gross margin.

Overall Insights

The combined data indicates a healthy, growing financial profile with revenues and gross margins strengthening steadily. The stability in gross profit margin percentage suggests effective management of cost of goods sold relative to revenue. The company demonstrates capability to scale operations without significant erosion of profitability on a gross basis. Minor fluctuations in margins could be attributed to periodic market or cost variations but do not indicate any negative long-term trends.

The financial data reveals a consistent upward trend in key performance indicators over the analyzed quarters. Revenue displays a general increase from approximately 37.2 billion to 77.7 billion US dollars, indicating steady growth in the company’s top line. Although there are minor fluctuations within individual quarters, the overall trajectory is positive, with revenue nearly doubling across the given timeframe.

Operating income also demonstrates a robust growth pattern, rising from about 15.9 billion to 38.0 billion US dollars. This growth is somewhat proportional to the revenue increase, signifying effective control of operating expenses and enhanced operational efficiency. Despite occasional quarter-to-quarter volatility, the operating income maintains an upward momentum throughout the series.

The operating profit margin further supports the narrative of improving financial health. Starting at roughly 38.2%, the margin steadily expands to about 46.3%. This continuous margin enhancement suggests that the company is not only growing revenues but is also improving its profitability relative to its revenue base. This improvement may reflect operational leverage, cost management, or a favorable shift in the product or service mix.

Overall, the data indicates a solid financial performance characterized by increasing revenues, growing operating income, and rising profit margins. These trends suggest effective management strategies and a strengthening market position over the reported periods.

The analysis of the quarterly financial metrics from September 2020 to September 2025 reveals several key trends and patterns regarding net income, revenue, and net profit margin.

Net Income (US$ in millions)

Net income exhibited a general upward trend over the analyzed periods. Starting at approximately 13,893 million USD in September 2020, it experienced notable growth peaks and some fluctuations, reaching 27,747 million USD by September 2025. Significant growth phases are observed particularly around late 2023 and throughout 2024, with a slight deceleration in the mid-2025 quarters but overall positive momentum.

Revenue (US$ in millions)

Revenue showed consistent growth throughout the period, increasing from 37,154 million USD in September 2020 to 77,673 million USD by September 2025. The trajectory was steadily ascending, with minor fluctuations. Periods such as December 2021 to June 2022 and December 2023 to September 2024 highlighted stronger revenue growth acceleration, indicating successful performance in sales or service delivery. The steady upward movement suggests expansion efforts or increased market penetration.

Net Profit Margin (%)

The net profit margin maintained a relatively stable range between approximately 32% to 38% across all quarters. The margin peaked around 38.51% in late 2021 and stayed mostly above 33% thereafter. This stability in margin, alongside increasing revenue and net income, indicates effective cost control and operational efficiency, supporting profitability even with increasing scale.

Overall, the financial data depicts sustained growth in both revenue and net income, accompanied by stable and healthy profit margins. The continued upward trajectory in these key financial indicators points to strengthened financial health and operational performance over the five-year period. Despite minor fluctuations, the consistency in profit margins reinforces the company’s ability to convert revenue into profit efficiently.

The analysis of the quarterly financial indicators reveals notable trends in the company's profitability, equity base, and return on equity (ROE) over the examined periods.

Net Income

Net income demonstrates a generally upward trajectory from September 30, 2020, through September 30, 2025. Starting at approximately 13.9 billion US dollars, the figure rises with some fluctuations to reach around 27.7 billion US dollars by the last reported quarter. Peaks and slight declines are observed in some quarters, for example, a peak near 20 billion dollars by mid-2023 followed by minor dips, but the overall pattern indicates increasing profitability.

Stockholders’ Equity

Stockholders’ equity consistently increases across the periods without any declines. From a base of approximately 123.4 billion US dollars at the end of September 2020, it expands steadily to about 363.1 billion US dollars by September 2025. This steady increase reflects sustained growth in the company’s net assets, signaling reinforcement of the financial foundation and accumulated retained earnings.

Return on Equity (ROE)

The ROE metric shows a declining trend over the timeline examined. It starts at a high level of over 38% in late 2020, reaching above 44% in 2021 and early 2022, indicating very effective use of equity to generate net income during this period. However, from mid-2022 onwards, ROE declines progressively, dropping below 30% by mid-2025. This decline suggests that despite rising net income and equity, the incremental return generated per unit of shareholder equity is diminishing.

Summary: Over the given timeframe, the company achieved significant net income growth accompanied by a robust increase in stockholders’ equity. Nevertheless, the return on equity exhibits a downward trend, indicating a potential dilution of equity efficiency. This divergence between rising equity and net income versus decreasing ROE could result from accelerated equity growth outpacing net income increases or other structural changes impacting profitability ratios. The financial data collectively suggest strong expansion but also reflect challenges in maintaining the high efficiency of equity capital deployment observed in earlier periods.

The financial data reveals several important trends in the company's recent quarterly performance, reflecting changes in profitability, asset size, and return metrics.

Net Income

Net income exhibited an overall upward trajectory with some fluctuations. Starting at 13,893 million US dollars in the third quarter of 2020, net income peaked notably at 25,824 million by the third quarter of 2025. Intermittent quarters showed slight declines or plateaus, such as a dip in late 2022 and early 2023, but the general trend indicates strengthening profitability over the observed time frame.

Total Assets

The size of the total asset base showed consistent growth throughout the period. Assets increased from approximately 301 billion US dollars in the third quarter of 2020 to over 636 billion by the third quarter of 2025, more than doubling in size. This steady growth suggests ongoing investment and expansion efforts, supporting the company's operational and growth strategies.

Return on Assets (ROA)

The ROA metric started relatively high at 15.78% and improved to around 21% by early 2022, demonstrating increasing efficiency in asset utilization. However, from mid-2022 onward, ROA displayed a gradual decline fluctuating between approximately 17% and 16%, indicating that despite asset growth, the return generated per unit of asset slightly moderated in the later quarters. This could reflect either changes in asset composition or profit margin pressures.

In summary, the company has shown a solid capacity to grow net income alongside an expanding asset base. While the return on assets has experienced a modest reduction in recent periods after earlier gains, it remains at a relatively high level, indicating sustained operational effectiveness. The data suggests continued positive momentum in profitability and scale, albeit with some emerging considerations regarding efficiency in asset utilization over time.