Microsoft Corp. (NASDAQ:MSFT)

Gross Profit Margin

The gross profit margin exhibited relative stability over the observed periods, fluctuating marginally between approximately 67.78% and 69.76%. The margin saw a slight decline after reaching its peak around June 30, 2024, indicating consistent efficiency in managing production costs relative to revenue.

Operating Profit Margin

The operating profit margin demonstrated a clear upward trend overall, rising from 37.03% in mid-2020 to 45.62% by mid-2025. This increase reflects improving operational efficiency and potentially better control over operating expenses or enhanced revenue streams. Despite minor fluctuations, the general direction is positive, culminating in the highest margin observed in 2025.

Net Profit Margin

The net profit margin followed a pattern of increase through 2022, peaking near 36.69%, then slightly receded by mid-2023 before recovering modestly by mid-2025 to 36.15%. This suggests that after initial gains in profitability, there was some pressure on net income possibly due to non-operating factors or tax changes, though the margin remains strong overall.

Return on Equity (ROE)

Return on equity reached its highest levels around 2021 and 2022, surpassing 43%, but showed a marked decrease in subsequent years to 29.65% by 2025. This downward trend indicates diminishing efficiency in generating returns from shareholders’ equity and could reflect either increased equity base without proportional net income growth or a reduction in profitability relative to equity.

Return on Assets (ROA)

Return on assets improved steadily from 14.7% in 2020 to nearly 20% by 2022, followed by a gradual decline through 2025 to 16.45%. This pattern suggests an initial enhancement in asset utilization efficiency to generate profit, which later faced moderate erosion, possibly related to changes in asset composition or profit levels.

Gross Margin

The gross margin has exhibited a consistent upward trend over the observed periods, increasing from US$96,937 million in 2020 to US$193,893 million in 2025. This represents a doubling of the gross margin over five years, indicating substantial growth in the company's core profitability at the gross level.

Revenue

The revenue figures demonstrate a steady increase year-over-year, rising from US$143,015 million in 2020 to US$281,724 million in 2025. This nearly twofold growth in revenue correlates with the rising gross margin, suggesting expanding sales and effective revenue-generating strategies.

Gross Profit Margin Percentage

The gross profit margin percentage has remained relatively stable throughout the periods, fluctuating within a narrow range from 67.78% in 2020 to 68.82% in 2025. The margin peaked at 69.76% in 2024, indicating slight improvement in cost management relative to revenue. Overall, the stability in this ratio suggests consistent operational efficiency despite significant revenue growth.

Summary

Overall, the data reflects strong and sustained growth in both revenue and gross margin values, underpinned by a consistent gross profit margin percentage. The company appears to maintain effective control over its cost of goods sold relative to its increasing revenue, facilitating enhanced absolute profitability while sustaining a stable profitability ratio. These trends indicate robustness in financial performance and operational efficiency over the analyzed time frame.

Revenue Trends

Revenue has shown a consistent upward trajectory over the six-year period, increasing from $143,015 million in 2020 to $281,724 million in 2025. This represents nearly a doubling of revenue, indicating strong growth in the company's sales and market presence.

Operating Income Development

Operating income also exhibits a steady increase, growing from $52,959 million in 2020 to $128,528 million in 2025. The rise in operating income is proportionally greater than the increase in revenue, reflecting effective cost management or improved operational efficiencies.

Operating Profit Margin Analysis

The operating profit margin has improved consistently from 37.03% in 2020 to 45.62% in 2025. This upward trend suggests that the company is enhancing its profitability by increasing its earnings relative to revenue. The margin demonstrates steady improvement each year, with a notable increase after 2023.

Overall Insights

The financial data illustrates a robust growth trend with increasing revenues and operating income alongside improving profitability margins. The rising operating profit margin indicates operational efficiency improvements and possibly favorable cost structures or pricing power. The sustained growth in both revenue and operating income points to healthy business expansion and effective management strategies over the years analyzed.

Revenue Trends

The revenue shows a consistent upward trajectory from 143,015 million US dollars in 2020 to an estimated 281,724 million US dollars in 2025, indicating sustained growth over the periods analyzed.

Net Income Trends

Net income has experienced a significant increase, rising from 44,281 million US dollars in 2020 to a projected 101,832 million US dollars in 2025. This demonstrates strong profitability growth, approximately doubling within the five-year span.

Net Profit Margin Analysis

The net profit margin exhibits relatively stable levels, beginning at 30.96% in 2020 and reaching around 36.15% by 2025. Margins peaked near 36.69% in 2022, followed by a slight decline and subsequent stabilization, suggesting effective cost management despite revenue expansion.

Overall Financial Performance Insights

The data illustrates robust financial performance characterized by increasing revenues and net income, coupled with sustained profitability margins above 30%. The growth rates reflect strong operational efficiency and market position, with profit margins indicating healthy returns on revenue throughout the observed timeframe.

The financial data presents several notable trends over the periods ending June 30 from 2020 through 2025. Net income exhibits a consistent upward trajectory, increasing from $44,281 million in 2020 to a projected $101,832 million in 2025. This reflects strong profitability growth, with the most significant increments occurring in the later years, particularly between 2023 and 2025.

Stockholders’ equity also shows a significant and steady increase, rising from $118,304 million in 2020 to a forecasted $343,479 million in 2025. This suggests an expansion in the company's net assets and a potentially strengthened financial base.

Return on equity (ROE), measured as a percentage, displays a different pattern. Despite the increases in net income and equity, ROE declines from a high of 43.68% in 2022 to 29.65% projected in 2025. This downward trend indicates that while earnings are growing, they are doing so at a slower rate relative to the growth of equity. The reduction in ROE may reflect capital concentration or lower efficiency in generating profits from the equity base over time.

Net Income Trends

Consistent growth with approximately doubling from 2020 to 2025.

Stockholders’ Equity Trends

Substantial increases each year, nearly tripling from 2020 to 2025.

Return on Equity Trends

Peaked around 2021-2022 and then steadily declined through 2025 despite increasing net income.

Overall Insights

The company is expanding its profitability and equity base significantly; however, the efficiency of profit generation relative to equity is decreasing, suggesting increased capital intensity or dilution of returns.

Net Income

The net income exhibited a consistent upward trend over the examined periods. Starting at 44,281 million US dollars in June 2020, it saw a significant increase to 61,271 million in 2021, followed by a steady rise each subsequent year, reaching 101,832 million by June 2025. This indicates strong profitability growth over the five-year span.

Total Assets

Total assets also demonstrated a substantial growth trajectory. From 301,311 million US dollars in June 2020, the asset base expanded each year, culminating in 619,003 million by June 2025. This nearly doubled asset position suggests an aggressive expansion or substantial investments in assets during the period.

Return on Assets (ROA)

The ROA showed some variability, peaking at 19.94% in June 2022. Although it decreased slightly after this peak, it remained strong and relatively stable above 16% through June 2025. The initial increase indicates improved efficiency in utilizing assets to generate profits, while the subsequent modest decline may reflect the faster growth in assets compared to net income in later years.

Overall Insights

The financial data reflects robust and sustained growth in both profitability and asset accumulation. The company has effectively leveraged its expanding asset base to generate higher net income, although the efficiency of asset use, as measured by ROA, has experienced minor fluctuations. The increase in net income outpaces the growth in assets, supporting a healthy profitability outlook despite the slight ROA reduction towards the end of the period.