Microsoft Corporation (MSFT) — Company Research

Last Updated: 3 September 2026

Microsoft closed fiscal 2026 on 30 June with revenue of $331,839m, operating income of $155,237m and Azure past $100bn of annual revenue for the first time. It also spent $115,948m on property and equipment in the year, plus $24,608m of finance leases, and has guided fiscal 2027 capital investment to approximately $175bn. That combination — record earnings alongside record capital consumption — is the whole argument about Microsoft in 2026, and it is why the shares were down roughly 19% year to date before the July results and then posted their biggest one-day gain since 2008. On 2 September 2026 Microsoft announced it is collapsing three reportable segments into two from fiscal 2027. This report sets out what the filings say, without ratings or price targets.

1. Company Snapshot

Field	Value
Ticker / exchange	MSFT — Nasdaq. Commission file number 001-37845; incorporated in Washington State
Headquarters	Redmond, Washington, United States
CEO / Leadership	Satya Nadella (Chairman and Chief Executive Officer); Amy Hood, Executive Vice President and Chief Financial Officer; Bradford L. Smith, Vice Chair and President; Judson Althoff, Chief Executive of the commercial business; Mustafa Suleyman, Chief Executive of Microsoft AI
Employees	Approximately 223,000 full-time as at 30 June 2026 — 121,000 in the United States and 102,000 internationally
Fiscal year end	30 June
Latest reported period	Q4 FY2026 and the FY2026 full year, ended 30 June 2026, released 29 July 2026. The FY2026 Form 10-K was filed the same day
Revenue (FY2026)	$331,839m, up 17.8% year on year and 16% in constant currency
Net income (FY2026)	$133,749m, up 31%
GAAP diluted EPS (FY2026)	$17.95. Non-GAAP diluted EPS $17.28
Share price	$496.82 (3 September 2026)
Market capitalisation	Approximately $3.689 trillion
Shares outstanding	7,425,545,491 as at 23 July 2026, per the Form 10-K cover page
Dividend	$0.91 per quarter; $3.64 declared across FY2026, totalling $27.0bn
Segments	Three in FY2026. Moving to two — Agents and Infra, and Devices and Consumer — from FY2027, announced 2 September 2026

2. Bull and Bear Case

Bull Case

• Azure is accelerating, not maturing: Azure and other cloud services grew 43% in Q4 FY2026 against 40% in Q3, crossed $100bn of annual revenue for the first time in FY2026, and is guided to roughly 45% constant-currency growth in Q1 FY2027.
• The backlog is enormous and broadening: commercial remaining performance obligation reached $678bn at 30 June 2026, up 84% and up $51bn sequentially, with management attributing the sequential growth to customers other than AI model developers.
• Copilot has moved from pilot to installed base: Microsoft 365 Copilot passed 30 million paid seats in Q4 FY2026 from just over 20 million in April 2026, GitHub Copilot reached 50 million users, and the high-end E7 bundle has been bought by hundreds of enterprises covering millions of seats.
• Operating leverage is holding through the build: operating income grew 21% to $155,237m in FY2026 on 18% revenue growth, with a 45.1% operating margin in Q4, and guidance is for operating margin to remain relatively flat year on year in Q1 FY2027 despite the capital programme.
• The balance sheet carries no strain: total debt was $40,294m against $76,843m of cash and short-term investments at 30 June 2026 — a net cash position of $36.5bn — and Microsoft issued no debt at all in FY2026 while returning $16.7bn through buybacks and $26.4bn in dividends.

Bear Case

• Free cash flow is falling while earnings rise: FY2026 free cash flow of $67.0bn was below FY2025's $71.6bn despite net income rising 31%, and Q4 free cash flow fell 23% to $19.6bn. Amy Hood's assurance that Microsoft should remain free-cash-flow positive in FY2027 is a low bar for a company earning $134bn.
• Reported earnings are flattered by investment gains: $6.5bn of other income in FY2026 was net gains on the OpenAI investment, primarily a non-cash dilution gain, plus a $3.2bn Anthropic gain in Q4 alone. Non-GAAP net income grew 22%, not 31%, and the same line produced $4.8bn of losses in FY2025.
• Depreciation is compounding fast: depreciation expense went from $15.2bn in FY2024 to $22.0bn in FY2025 to $34.3bn in FY2026, and property and equipment net rose from $205bn to $313bn in a single year. Microsoft is simultaneously extending building useful lives from 15 to 25 years for FY2027, which slows the charge without improving operations.
• Concentration in one customer: OpenAI generated $24.1bn of Microsoft revenue in FY2026, roughly 7.3% of the company, with $6.0bn still in receivables at 30 June 2026, and Microsoft said in January 2026 that around 45% of its then-$625bn commercial backlog was tied to OpenAI. The agreement has been renegotiated twice in nine months.
• Rivals are growing faster from adjacent positions: Google Cloud grew 82% to $24.8bn in the June 2026 quarter with a $514bn backlog, AWS accelerated to 37% on a larger $169bn run-rate base, and Alphabet's market capitalisation now exceeds Microsoft's.

3. Business Segments

The table below is FY2026 as reported, on the three-segment basis used through the year ended 30 June 2026.

Segment	% of revenue	What it is
Productivity and Business Processes	42.2% ($139,996m)	Microsoft 365 commercial and consumer products and cloud services, Dynamics 365 and Dynamics products, and LinkedIn. Grew 15.9% in FY2026; operating income $83,879m at a 59.9% margin — the highest-margin segment.
Intelligent Cloud	41.5% ($137,791m)	Server products and cloud services, including Azure, plus enterprise and partner services. Grew 29.7% in FY2026; operating income $56,972m at a 41.3% margin. This is where the capital expenditure lands.
More Personal Computing	16.3% ($54,052m)	Search advertising, XBOX content, services and hardware, and Windows OEM and devices. The only shrinking segment, down 1.1% in FY2026; operating income $14,386m at a 26.6% margin.

Two reporting changes matter when comparing history. Microsoft recast its segments in FY2025, moving much of the commercial Microsoft 365 business into Productivity and Business Processes, so figures published before August 2024 are not comparable without restatement. And on 2 September 2026 Microsoft announced a further change effective FY2027: two segments only, Agents and Infra covering the Microsoft Cloud, productivity and server licensing and support, and Devices and Consumer covering Windows, XBOX and advertising. On the restated FY2026 basis, Agents and Infra had revenue of $268,127m and operating income of $136,365m, and Devices and Consumer $63,712m and $18,872m. Within that restatement GitHub cloud and Security Copilot move out of Azure into Microsoft 365 commercial cloud, healthcare and life sciences cloud moves into a new Industry solutions line, and LinkedIn is dismantled as a standalone line.

4. Business Model and Moat

How it makes money. Microsoft sells the same customers three things at once: a per-seat subscription to productivity software, consumption-based cloud infrastructure, and increasingly a per-seat AI add-on layered on top of both. In FY2026 that produced $267,143m of service and other revenue against just $64,696m of product revenue — the business is now overwhelmingly recurring. Microsoft Cloud revenue was $214.4bn, up 27%. The unearned-revenue and remaining-performance-obligation lines show how far forward the cash is contracted: $678bn of commercial backlog with a weighted-average duration of about 2.3 years, of which roughly 30% is expected to be recognised in the next twelve months.

Why customers do not leave. The moat is contractual and operational rather than technological. Enterprise agreements bundle identity, device management, productivity, security and now agents; unpicking one component means unpicking the others. Copilot deepens that by attaching to data already inside Microsoft 365, which is why paid seats went from just over 20 million in April 2026 to more than 30 million three months later. On the infrastructure side the constraint on growth is not demand but capacity — the FY2026 10-K states plainly that Microsoft has experienced supply constraints across semiconductors, networking equipment, power systems and cooling, and Nadella has publicly described rationing compute between Azure customers, internal research and Copilot.

What has changed structurally. Microsoft has stopped being a capital-light software company. Additions to property and equipment went from $28,107m in FY2023 to $115,948m in FY2026, and contractual obligations at 30 June 2026 totalled $743.8bn, of which $443.5bn is operating and finance leases including imputed interest, $194.1bn purchase commitments and $34.6bn construction commitments. These are obligations that do not flex if AI demand disappoints.

Diversifying the model supply. OpenAI remains the frontier partner, but on 18 November 2025 Microsoft committed up to $5bn to Anthropic alongside a $30bn Anthropic commitment to purchase Azure capacity, Anthropic's Claude models reached general availability in Microsoft Foundry in July 2026, and Mustafa Suleyman unveiled seven in-house MAI models at Build 2026. The strategy is now explicitly multi-model.

5. Financial Health

All figures are taken from Microsoft's quarterly earnings releases, the FY2026 Form 10-K filed 29 July 2026, and prior-year 10-K filings. Microsoft's fiscal year ends on 30 June, so FY2026 covers July 2025 to June 2026.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2022	198,270	+18.0%	$9.65	$9.21	$2.48	$47,032m
FY2023	211,915	+6.9%	$9.68	$9.81	$2.72	$41,990m
FY2024	245,122	+15.7%	$11.80	$11.80†	$3.00	$42,688m
FY2025	281,724	+14.9%	$13.64	$14.13‡	$3.32	$40,152m
FY2026	331,839	+17.8%	$17.95	$17.28	$3.64	$31,067m

† Microsoft published no non-GAAP EPS for FY2024; GAAP is repeated for completeness. ‡ FY2025 was reported GAAP-only at the time; the figure shown is Microsoft's own retrospective restatement onto the current OpenAI-adjusted basis, disclosed in the FY2026 release. The adjusted basis is not consistent across the table: FY2022 excludes a $3,291m tax benefit on the transfer of intangible properties from Puerto Rico, FY2023 excludes the January 2023 restructuring charge of $1,171m to operating income, and FY2025 and FY2026 exclude only the impact of investments in OpenAI. The long-term debt column is the noncurrent balance-sheet line; a current portion sits alongside it at $2,749m, $5,247m, $2,249m, $2,999m and $9,227m respectively, giving total debt of $40,294m at 30 June 2026.

The FY2026 adjusted figure is lower than GAAP rather than higher, which is unusual and important. OpenAI-related results were a net gain of $4,963m or $0.67 per share in FY2026, driven mainly by the dilution gain on the October 2025 OpenAI recapitalisation, so the adjustment removes profit rather than adding it back. The same line was a $3,620m loss in FY2025, which is why the restated FY2025 adjusted EPS of $14.13 sits above GAAP.

Quarter / Half	Revenue	Adjusted EPS	GAAP EPS
Q4 FY2026 (ended 30 Jun 2026)	$90,007m	$4.74	$4.81
Q3 FY2026 (ended 31 Mar 2026)	$82,886m	$4.27	$4.27
Q2 FY2026 (ended 31 Dec 2025)	$81,273m	$4.14	$5.16
Q1 FY2026 (ended 30 Sep 2025)	$77,673m	$4.13	$3.72
Q4 FY2025 (ended 30 Jun 2025)	$76,441m	$3.86	$3.65
FY2026 full year	$331,839m	$17.28	$17.95

The gap between the two EPS columns is entirely the OpenAI equity-method and dilution line. It added $1.02 per share in Q2 FY2026, removed $0.41 in Q1 FY2026, was immaterial in Q3 FY2026 at a $14m loss, and added $0.07 in Q4 FY2026. In Q2 FY2026 net income of $38,458m actually exceeded operating income of $38,275m as a result. Q4 FY2026 also contained a net benefit of $0.27 per share against April guidance from three discrete items: a $3.2bn gain on the Anthropic investment and lower-than-expected voluntary retirement programme expense, partly offset by severance and undisclosed impairment charges in XBOX.

Cash flow and balance sheet, FY2026: net cash from operations $182,935m against $136,162m in FY2025; additions to property and equipment $115,948m against $64,551m; right-of-use assets obtained in exchange for finance lease liabilities $24,608m, giving total capital investment of $140,556m. The cash-flow add-back line "depreciation, amortization, and other" was $38,534m, within which the 10-K states depreciation expense alone was $34.3bn. Free cash flow, being operating cash flow less additions to property and equipment, was $66,987m against $71,559m in FY2025. At 30 June 2026 cash, cash equivalents and short-term investments were $76,843m, down from $94,565m; property and equipment net was $313,076m, up from $204,966m; total assets $758,376m; total stockholders' equity $442,387m. Microsoft raised no debt in FY2026 and repaid $3,000m.

Guidance issued 29 July 2026 for Q1 FY2027: total revenue of $89.85–90.95bn, cost of goods sold $29.6–29.8bn, operating expenses $16.8–16.9bn, an effective tax rate of approximately 20%, operating margin relatively flat year on year, and capital expenditure of over $50bn including the effect of the useful-life change. For the full year Microsoft guided total capital expenditure and finance leases of approximately $175bn. On 2 September 2026 the Q1 outlook was restated onto the new two-segment basis at Agents and Infra $75.15–75.75bn and Devices and Consumer $14.7–15.2bn, with Azure re-guided to 44–45% constant-currency growth on the restated Azure definition. Total company revenue, costs, margin, tax rate and capital expenditure guidance were unchanged.

6. Valuation Metrics

Raw metrics, September 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	Approximately $3,689bn at $496.82, on 7,425,545,491 shares outstanding per the FY2026 Form 10-K cover page
Trailing P/E (GAAP)	27.7x on FY2026 GAAP diluted EPS of $17.95. On the non-GAAP figure of $17.28, which strips out the OpenAI investment result, the multiple is 28.8x — the higher number is arguably the cleaner one, because $0.67 of FY2026 GAAP EPS was a non-cash dilution gain
P/E (forward)	21.1x, on a forward earnings estimate of roughly $23.57 per share
P/S (TTM)	11.1x (market cap ~$3,689bn / FY2026 revenue $331,839m)
Enterprise value	Approximately $3,653bn (market cap ~$3,689bn + total debt $40.3bn − cash and short-term investments $76.8bn, per the 30 June 2026 balance sheet). Microsoft is in a net cash position of $36.5bn, so enterprise value sits below market capitalisation. This excludes $443.5bn of operating and finance lease obligations including imputed interest
EV/EBITDA (TTM)	Approximately 18.9x (EV ~$3,653bn / FY2026 EBITDA ~$193.8bn). EBITDA is FY2026 operating income of $155,237m plus the wider cash-flow add-back "depreciation, amortization, and other" of $38,534m. Using the narrower depreciation-only figure the 10-K discloses, $34.3bn, EBITDA would be $189.5bn and the multiple 19.3x
P/FCF	55.1x (market cap ~$3,689bn / FY2026 free cash flow $66,987m; FCF = net cash from operations $182,935m − additions to property and equipment $115,948m). Free cash flow fell from $71,559m in FY2025 despite net income rising 31%, and the figure excludes $24,608m of finance leases — including those, cash generation after all capital investment was $42.4bn
52-week high	$553.72
52-week low	$349.20
Short interest (% of float)	0.92% (68,544,953 shares short against a float of 7,414,481,428, settlement date 14 August 2026). This is a negligible position. The figure is single-sourced from a live market-data pull; Finviz, MarketBeat and Nasdaq.com could not be retrieved for cross-check
Days to cover	1.85 days on the 14 August 2026 settlement figures

Compare these against live price action on the ChartsView Live Charts page.

7. What Are They Building

The Fairwater AI estate. Fairwater 1 at Mount Pleasant and Kenosha, Wisconsin spans 315 acres and 1.2 million square feet across three buildings, houses hundreds of thousands of NVIDIA GB200 and GB300 GPUs in a single unified cluster, and is described by Microsoft as the world's most powerful AI data centre. Wisconsin investment across the first two campuses totals $7.3bn, with phase one peak power near 400MW and full build-out approaching 900MW. Reporting indicates the site went online in April 2026 around six weeks ahead of schedule and was declared fully operational on 23 June 2026. Fairwater 2 in Atlanta is connected to the Wisconsin site over a dedicated AI network to form what Microsoft calls an "AI superfactory", allowing sites in different states to train models jointly.

In-house silicon. Maia 200, Microsoft's second-generation AI inference accelerator, was released in January 2026, has entered mass production and now helps run Microsoft 365 Copilot. Maia 300 is reported to be unveiled in September 2026, with Microsoft negotiating TSMC capacity for upwards of 300,000 units for delivery in 2027 and an eventual ambition beyond one million. The strategic aim is to raise internal Maia usage and reduce dependence on a single GPU supplier. No fresh 2026 disclosure on the Cobalt CPU line was found.

Agents as a product category. At Build 2026 in early June, Agent 365 reached general availability including secure agent execution environments via Windows 365 for Agents; Fabric IQ was integrated with Agent 365 as a first-party tool and extended into Microsoft 365 Copilot; and one-click publishing of agents to Teams and Microsoft 365 Copilot went generally available. In Microsoft Foundry, Frontier Tuning was demonstrated for fine-tuning frontier models and ontologies became directly available as knowledge sources for custom and built-in agents. Microsoft 365 Copilot passed 30 million paid seats and GitHub Copilot 50 million users during the June quarter.

Its own models. Mustafa Suleyman used the Build 2026 keynote to unveil seven new MAI models spanning sizes and modalities, with named releases including MAI-Thinking-1, MAI-Code-1, MAI-Image-2.5 and MAI-Voice-2, plus a cost-efficient coding model introduced during the fourth quarter. This is Microsoft's explicit hedge against single-supplier model dependence, alongside the Anthropic partnership announced on 18 November 2025 under which NVIDIA committed up to $10bn and Microsoft up to $5bn to Anthropic, Anthropic committed to purchase $30bn of Azure capacity, and Claude models reached general availability in Microsoft Foundry in July 2026.

Quantum and post-quantum security. The topological programme continues around the Majorana 1 processor and 4D geometric error-correction codes, with the current chip reported at 12 qubits. The more consequential 2026 development is defensive: at the end of June 2026 Microsoft accelerated its Quantum Safe Program, bringing forward to 2029 the target for transitioning critical products and services to post-quantum cryptography, citing a shifted risk horizon. The Secure Future Initiative progress report published on 10 July 2026 folded post-quantum requirements into its scope alongside multifactor authentication adoption, access governance and vulnerability remediation.

Gaming, in the other direction. XBOX revenue fell from $23,455m in FY2025 to $21,790m in FY2026 and content and services fell 10% in Q4. On 6 July 2026 the Xbox division lost roughly a fifth of its staff and four studios were announced for spin-out; Game Pass prices were cut during the quarter and undisclosed impairment charges were taken. Q1 FY2027 guidance is for content and services to decline mid-single digits and hardware to decline again.

8. Competitive Landscape

Peer	Market cap (September 2026)	Key 2025 metric
Alphabet (GOOGL)	Approximately $4,123bn	Google Cloud revenue grew 82% to $24.8bn in the June 2026 quarter with cloud operating income of $8.8bn from $2.8bn, and a $514bn cloud backlog. Now larger than Microsoft by market capitalisation
Amazon (AMZN)	Approximately $2,750bn	AWS revenue of $42.2bn in the June 2026 quarter, up 37% and its fastest in 18 quarters, a $169bn annualised run rate, with operating income of $16.6bn at a 39.4% margin. AWS remains larger than Azure
Oracle (ORCL)	Approximately $419.8bn	Remaining performance obligations of $638bn at the end of FY2026 Q4, up 363% year on year, though Oracle disclosed that prepaid and customer-supplied GPU hardware accounts for $75bn of the total
Salesforce (CRM)	Approximately $211.5bn	FY2027 revenue guidance raised to $46.1–46.4bn at the 26 August 2026 results; Agentforce annual recurring revenue exceeded $1.5bn, up over 240%, with Agentforce and Data 360 combined at nearly $3.9bn
ServiceNow (NOW)	Approximately $141.3bn	Trailing revenue of $14.73bn. Note a 5-for-1 stock split effective 17 December 2025 — any pre-December 2025 share price must be divided by five to compare
IBM	Approximately $218.3bn	Trailing revenue of $69.09bn and trailing EPS of $11.28, on a forward multiple of 17.6x

The uncomfortable comparison is Alphabet. Azure grew 43% in the June quarter from a larger base, but Google Cloud grew 82% from a smaller one and Alphabet's market capitalisation has moved above Microsoft's. Microsoft shares were down roughly 19% year to date as at the 29 July close while the S&P 500 was up around 7%, before the results reversed a large part of that in a single session. Follow the earnings dates on the ChartsView Economic Calendar.

9. Insider Activity

Chairman and Chief Executive Officer Satya Nadella sold shares on 1 September 2026 under a Rule 10b5-1 trading plan, the largest disclosed executive disposal of the year. Every 2026 transaction identified below is a disposal; no open-market insider purchases were found. Note that the 31 August 2026 activity across the senior team was the annual equity grant and associated tax withholding at $513.53 per share, not open-market selling — Nadella acquired 178,622 shares with 70,466 withheld for tax, Amy Hood acquired 31,260 with 18,739 withheld, Bradford Smith acquired 27,688 with 17,036 withheld, and Judson Althoff acquired 29,724 with 18,081 withheld.

Name	Date	Type	Shares	Price	Value	Plan Type
Satya Nadella, Chairman and Chief Executive Officer	1 Sep 2026	Sale	86,525	$498.24–$505.20	Approximately $43.39m	Rule 10b5-1 plan
Judson Althoff, Chief Executive of the commercial business	5 Aug 2026	Sale	10,000	$487.89	Approximately $4.88m	No Rule 10b5-1 flag set
Takeshi Numoto, Executive Vice President and Chief Marketing Officer	4 Aug 2026	Sale	4,810	$496.48	Approximately $2.39m	No Rule 10b5-1 flag set
Alice L. Jolla, Chief Accounting Officer	15 Jun 2026	Award of restricted stock, not a sale	5,004	Not applicable	Not an open-market disposal	Vesting 5% from 15 Sep 2026 and 5% quarterly thereafter
Amy Coleman, Executive Vice President and Chief Human Resources Officer	14 May 2026	Sale	1,262	$411.34	Approximately $0.52m	No Rule 10b5-1 flag set
Kathleen T. Hogan, Executive Vice President, Strategy	6 Mar 2026	Sale	12,321	$409.52	Approximately $5.05m	No Rule 10b5-1 flag set

The May and March disposals were executed near the year's lows around $410, well below the $497 at which the shares now trade. Nadella's September sale is plan-based and is the only 2026 disposal carrying the Rule 10b5-1 affirmation flag.

10. Key Risks

• Capital expenditure and the depreciation drag: additions to property and equipment rose from $28,107m in FY2023 to $115,948m in FY2026, a 4.1-fold increase in three years, and FY2027 capital investment including finance leases is guided to approximately $175bn. Depreciation expense rose from $15.2bn to $34.3bn across two years. Free cash flow fell to $66,987m in FY2026 from $71,559m despite net income rising 31%, and the simultaneous extension of building useful lives from 15 to 25 years flatters future depreciation without improving operations.
• Capacity constraints and inflexible commitments: the FY2026 10-K states Microsoft has experienced and may continue to experience shortages of semiconductors, networking equipment, power systems and cooling equipment, that expanding supply may require multi-year lead times, and that it may only secure supply by paying above prevailing market rates. Q4 capital expenditure explicitly included higher component pricing. Purchase commitments of $194.1bn and construction commitments of $34.6bn do not flex if demand disappoints.
• Customer concentration in OpenAI: OpenAI generated $24.1bn of Microsoft revenue in FY2026, roughly 7.3% of the company, with $6.0bn outstanding in receivables at 30 June 2026, and Microsoft said in January 2026 that around 45% of its then-$625bn commercial backlog was tied to OpenAI. Microsoft has funded $11.9bn of a $13.0bn commitment, holds an equity-method interest of approximately 25% as converted, has given up its right of first refusal on OpenAI compute, and has renegotiated the agreement twice in nine months.
• Earnings quality distorted by investment marks: $6.5bn of FY2026 other income was net gains on the OpenAI investment, primarily a non-cash dilution gain, plus a $3.2bn Anthropic gain in Q4. The same line produced $4.8bn of losses in FY2025 and $1.5bn in FY2024. These marks are non-recurring and can reverse; GAAP EPS of $17.95 is $0.67 above the non-GAAP figure as a result.
• Cloud competition from faster-growing rivals: Google Cloud grew 82% to $24.8bn in the June 2026 quarter with a $514bn backlog and AWS accelerated to 37% on a $169bn run-rate base, while Oracle reported $638bn of remaining performance obligations. Alphabet's market capitalisation now exceeds Microsoft's, and Microsoft shares were down roughly 19% year to date as at 29 July 2026 against a 7% rise in the S&P 500.
• Antitrust and regulatory action on three continents: the UK Competition and Markets Authority opened a Strategic Market Status investigation into Microsoft's business software ecosystem on 14 May 2026 with a decision due by February 2027; the European Commission said on 25 June 2026 that Azure should preliminarily be treated as a Digital Markets Act gatekeeper, with a decision required by November 2026 and six months to comply thereafter; and the US Federal Trade Commission's investigation into cloud and productivity licensing practices and the OpenAI relationship continues into 2026.
• Cybersecurity as an existential rather than merely costly risk: Microsoft lists cyberattacks and security vulnerabilities first among its non-competition risk factors, noting they could lead to reduced revenue, increased costs, liability claims and reputational harm. The Secure Future Initiative exists because of prior state-actor breaches, and the pull-forward of the post-quantum cryptography deadline to 2029 is an admission that the cryptographic threat model is moving faster than planned.
• Gaming contraction three years after Activision Blizzard: More Personal Computing revenue fell 1.1% in FY2026 and 4% in Q4, XBOX revenue fell from $23,455m to $21,790m, and content and services fell 10% in the quarter. Microsoft cut roughly a fifth of Xbox staff on 6 July 2026, announced four studio spin-outs, cut Game Pass prices, and took undisclosed impairment charges. Q1 FY2027 guidance is for further declines in both content and hardware.
• Currency and the PC cycle: Microsoft flagged a $4,445m favourable currency impact on FY2026 revenue and $2,896m on operating income, meaning roughly two points of reported revenue growth was foreign exchange that will not repeat if the dollar strengthens. Windows OEM and devices fell 7% in Q4 FY2026 and is guided to decline in the low twenties in Q1 FY2027, far steeper than the wider PC market.

11. Recent Developments

• 10 Mar 2026 — Quarterly dividend of $0.91 per share declared. The third of four declarations at that rate during FY2026, which totalled $3.64 per share and $27.0bn in aggregate.
• 24 Apr 2026 — First-ever voluntary retirement programme announced. Buyouts were offered to roughly 8,750 US employees, about 7% of the domestic workforce, open to senior director level and below under a "Rule of 70" formula of age plus years of service. Reporting indicates about 30% of those eligible accepted; lower-than-expected expense later helped Q4 earnings.
• 29 Apr 2026 — Q3 FY2026 results. Revenue $82,886m up 18%, operating income $38,398m up 20%, GAAP diluted EPS $4.27 up 23%, Intelligent Cloud $34,681m up 30% and Azure up 40%. Guidance issued that day was received as light and the shares fell.
• 14 May 2026 — UK Competition and Markets Authority opened a Strategic Market Status investigation. The nine-month probe covers Microsoft's business software ecosystem, focusing on licensing practices and AI interoperability, with a designation decision due by February 2027. Carmine Di Sibio's appointment to the Board was announced the same day, joining the Audit and Compensation Committees.
• 02 Jun 2026 — Reid Hoffman confirmed he will not stand for re-election. After nine years as a director he serves until the 2026 annual shareholder meeting; the departure is not the result of any disagreement with management.
• 10 Jun 2026 — Quarterly dividend of $0.91 declared, record date 20 August 2026, payable 10 September 2026. The shares have already traded ex-dividend, so that payment is locked in.
• 25 Jun 2026 — European Commission said AWS and Azure should preliminarily be treated as Digital Markets Act gatekeepers. A decision is required by November 2026, with six months to comply thereafter if designated.
• 06 Jul 2026 — 4,800 jobs cut, about 2.1% of the workforce. The reduction spanned sales, consulting and gaming, with the Xbox division losing roughly one-fifth of its staff and four gaming studios announced for spin-out. Xbox chief executive Asha Sharma announced the cuts.
• 29 Jul 2026 — Q4 FY2026 and full-year results, and the FY2026 Form 10-K filed the same day. Q4 revenue $90,007m up 18% against consensus of $87.62bn, GAAP diluted EPS $4.81 against $4.24 expected, Azure up 43%, Microsoft Cloud $59.3bn up 27%, and commercial remaining performance obligation $678bn up 84%. FY2027 capital expenditure plus finance leases was guided to approximately $175bn and building useful lives extended from 15 to 25 years.
• 30 Jul 2026 — Shares posted their biggest one-day gain since 2008, adding roughly $480bn of market value. The move followed a year-to-date decline of roughly 19% into the print.
• 10 Aug 2026 — Reported that Microsoft will unveil the Maia 300 AI accelerator in September 2026. Microsoft is said to be negotiating TSMC capacity for upwards of 300,000 units for 2027 delivery.
• 01 Sep 2026 — Satya Nadella sold 86,525 shares for approximately $43.4m under a Rule 10b5-1 plan. Prices ranged from $498.24 to $505.20 across eight weighted-average bands.
• 02 Sep 2026 — Microsoft announced a move to two reportable segments from FY2027. Agents and Infra, and Devices and Consumer, replace the current three, with restated FY2025 and FY2026 quarterly history and a mechanically adjusted Q1 FY2027 outlook. Total company guidance was unchanged.

Two absences are worth noting. Microsoft issued no debt at all in FY2026 — proceeds from issuance of debt were nil against $3,000m of repayments — and no new buyback authorisation was announced, with $40.6bn remaining at 30 June 2026 of the $60bn programme authorised in September 2024. Readers comparing notes can do so on the ChartsView Forum.

12. Key Dates

• 10 Sep 2026 — Quarterly dividend of $0.91 per share paid, to holders of record on 20 August 2026. Declared 10 June 2026.
• Expected September 2026 — Maia 300 AI accelerator unveiling, reported on 10 August 2026 with no confirmed date.
• Expected September 2026 — Declaration of the next quarterly dividend, together with the annual increase. Microsoft has raised the quarterly rate every September for more than a decade; the last six increases were 9.8%, 10.7%, 9.7%, 10.3%, 10.7% and 9.6%, and the September 2025 declaration took the rate from $0.83 to $0.91. No declaration had been made as at 3 September 2026.
• Expected October 2026 — Q1 FY2027 results, for the quarter ending 30 September 2026, and the first quarter reported on the new two-segment basis. Calendars most commonly cite 27 October 2026 after market close, with one carrying 28 October; Microsoft has not posted an official confirmation.
• Expected November 2026 — European Commission decision deadline on whether Azure is designated a Digital Markets Act gatekeeper, following the preliminary view of 25 June 2026. Designation would trigger a six-month compliance period.
• 17 Nov 2026 — Microsoft Ignite 2026 opens at the Moscone Center, San Francisco, running to 20 November.
• 08 Dec 2026 — 2026 Annual Shareholders Meeting, held virtually at 8:30am Pacific Time. Reid Hoffman's board term ends at this meeting.
• Expected February 2027 — UK Competition and Markets Authority decision on Strategic Market Status for Microsoft's business software ecosystem, nine months from the 14 May 2026 opening.
• Expected May 2027 — Microsoft Build 2027 at the Seattle Convention Center. Dates of 18 to 20 May 2027 are circulating but have not been officially announced.

The exact dollar amount of the XBOX impairment taken in Q4 FY2026 has not been disclosed, and the precise terms of the April 2026 OpenAI amendment are confirmed to exist by the Form 10-K but not detailed in it. Both remain outstanding disclosure items.

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