Stock Analysis on Net
Stock Analysis on Net

Microsoft Corp. (NASDAQ:MSFT)

$24.99

Enterprise Value to EBITDA (EV/EBITDA)

Microsoft Excel

Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

Microsoft Corp., EBITDA calculation

US$ in millions

Microsoft Excel
12 months ended: Jun 30, 2026 Jun 30, 2025 Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021
Net income
Add: Income tax expense
Earnings before tax (EBT)
Add: Interest expense
Earnings before interest and tax (EBIT)
Add: Depreciation, amortization, and other
Earnings before interest, tax, depreciation and amortization (EBITDA)

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).


A consistent and accelerating upward trajectory is observed across all primary earnings metrics between June 2021 and June 2026. Financial performance indicates a sustained expansion in operational scale, with profitability metrics showing significant growth, particularly in the latter half of the period.

EBITDA Growth and Acceleration
Earnings before interest, tax, depreciation and amortization increased from US$ 85,134 million in 2021 to US$ 207,519 million in 2026. A notable acceleration in growth is evident after 2023, with the most substantial year-over-year increase occurring between 2025 and 2026, where EBITDA grew by approximately 29%.
Analysis of Depreciation and Amortization
A widening gap is observed between EBITDA and EBIT, which reflects an increase in non-cash charges. The difference between these two metrics rose from US$ 11,686 million in 2021 to US$ 38,534 million in 2026. This trend indicates a significant escalation in capital expenditures and the subsequent depreciation of long-term assets.
Operational Profitability vs. Net Income
While Net Income grew from US$ 61,271 million in 2021 to US$ 133,749 million in 2026, it experienced a marginal decline between 2022 and 2023. In contrast, EBIT and EBT continued to rise during that same interval, suggesting that the temporary dip in net income was attributable to factors below the operating line, such as tax fluctuations or non-operating expenses, rather than a decline in core business performance.
Earnings Before Tax (EBT) Trends
Earnings before tax maintained a steady growth rate throughout the period, rising from US$ 71,102 million in 2021 to US$ 165,934 million in 2026. The stability of EBT growth relative to the more aggressive growth seen in EBITDA suggests that while operational cash flow is expanding rapidly, the impact of interest and other non-operating items remains controlled.

Enterprise Value to EBITDA Ratio, Current

Microsoft Corp., current EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV)
Earnings before interest, tax, depreciation and amortization (EBITDA)
Valuation Ratio
EV/EBITDA
Benchmarks
EV/EBITDA, Competitors1
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.
EV/EBITDA, Sector
Software & Services
EV/EBITDA, Industry
Information Technology

Based on: 10-K (reporting date: 2026-06-30).

1 Click competitor name to see calculations.

If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.


Enterprise Value to EBITDA Ratio, Historical

Microsoft Corp., historical EV/EBITDA calculation, comparison to benchmarks

Microsoft Excel
Jun 30, 2026 Jun 30, 2025 Jun 30, 2024 Jun 30, 2023 Jun 30, 2022 Jun 30, 2021
Selected Financial Data (US$ in millions)
Enterprise value (EV)1
Earnings before interest, tax, depreciation and amortization (EBITDA)2
Valuation Ratio
EV/EBITDA3
Benchmarks
EV/EBITDA, Competitors4
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.
EV/EBITDA, Sector
Software & Services
EV/EBITDA, Industry
Information Technology

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).

1 See details »

2 See details »

3 2026 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =

4 Click competitor name to see calculations.


The financial trajectory from June 30, 2021, to June 30, 2026, is characterized by consistent operational growth contrasted with fluctuating market valuation, culminating in a significant compression of the valuation multiple in the final period.

Enterprise Value (EV) Trends
Enterprise value experienced an overall upward trend for the majority of the analyzed period, climbing from US$ 2,093,369 million in 2021 to a peak of US$ 3,809,756 million in 2025. This growth phase suggests a period of increasing market confidence and asset appreciation. However, a sharp reversal occurred by June 30, 2026, with the value declining to US$ 2,930,018 million, marking a notable correction from the previous year's high.
EBITDA Performance
Earnings before interest, tax, depreciation, and amortization demonstrated steady and uninterrupted expansion throughout the six-year window. EBITDA rose from US$ 85,134 million in 2021 to US$ 207,519 million in 2026. The consistent year-over-year increase indicates strong operational efficiency and a robust capacity to generate cash flow from core business activities, regardless of the volatility seen in the overall enterprise value.
EV/EBITDA Ratio Analysis
The EV/EBITDA ratio remained relatively stable between 2021 and 2025, oscillating within a range of 20.17 to 24.59. This stability suggests that the market valuation largely tracked the growth in earnings during this interval. A substantial shift is observed in 2026, where the ratio dropped to 14.12. This contraction is the result of a dual impact: a decrease in the enterprise value coinciding with a continued increase in EBITDA, leading to a significantly lower valuation multiple relative to operational earnings.