Microsoft Corp. (MSFT) Q2 2026 Financial Results Summary
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Microsoft (MSFT) Q2 2026 Financial Results Summary
Release Date: January 28, 2026
Microsoft Corp. has reported its financial results for the quarter ended December 31, 2025. Below is a summary of notable metrics and business highlights, along with comparisons to the same quarter of the previous fiscal year, FY2025.
Financial Performance:
- Total Revenue:
- Q2 2026: $81.3 billion
-
Growth: Increased 17% (15% growth in constant currency).
-
Operating Income:
- Q2 2026: $38.3 billion
-
Growth: Increased 21% (19% growth in constant currency).
-
Net Income (GAAP):
- Q2 2026: $38.5 billion
-
Growth: Increased 60%.
-
Net Income (Non-GAAP):
- Q2 2026: $30.9 billion
-
Growth: Increased 23% (21% growth in constant currency).
-
Diluted Earnings Per Share (EPS):
- GAAP:
- Q2 2026: $5.16
- Growth: Increased 60%.
- Non-GAAP:
- Q2 2026: $4.14
- Growth: Increased 24% (21% growth in constant currency).
Segment Performance:
- Microsoft Cloud Revenue:
- Q2 2026: $51.5 billion
-
Growth: Increased 26% (24% growth in constant currency).
-
Productivity and Business Processes:
- Revenue: $34.1 billion
- Growth: Increased 16% (14% growth in constant currency).
-
Highlights:
- Microsoft 365 Commercial cloud: Increased 17% (14% in constant currency).
- Microsoft 365 Consumer cloud: Increased 29% (27% in constant currency).
- LinkedIn revenue: Increased 11% (10% in constant currency).
- Dynamics 365 revenue: Increased 19% (17% in constant currency).
-
Intelligent Cloud:
- Revenue: $32.9 billion
- Growth: Increased 29% (28% in constant currency).
-
Azure and other cloud services revenue: Increased 39% (38% in constant currency).
-
More Personal Computing Segment:
- Revenue: $14.3 billion
- Change: Decreased 3%.
- Highlights:
- Windows OEM and Devices: Increased 1% (unchanged in constant currency).
- Xbox content and services: Decreased 5% (6% in constant currency).
- Search and news advertising revenue: Increased 10% (9% in constant currency).
Shareholder Returns:
- Microsoft returned $12.7 billion to shareholders during this quarter, including dividends and share repurchases.
- Increase: 32% compared to the same quarter of FY2025.
General Insights:
- Billings for Microsoft’s commercial cloud portfolio showcased a significant uptick, with commercial remaining performance obligation rising 110% to $625 billion.
Closing Thoughts:
Microsoft continues to show robust growth across various segments, particularly driven by demand in Cloud and AI services. The reported increases in key financial metrics indicate a strong overall performance compared to the previous fiscal year’s second quarter. The outlook for future quarters involves continued investment in AI and cloud technologies, with forward-looking guidance expected to be shared during the earnings conference call later today.
Here are the extracted tables from the press release in HTML format, preserving their original structure.
MICR​O​SOFT CORPORATION INCOME STATEMENTS (In millions, except per share amounts) (Unaudited)
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Revenue: | ||||
| Product | $16,451 | $16,219 | $32,373 | $31,491 |
| Service and other | 64,822 | 53,413 | 126,573 | 103,726 |
| Total revenue | 81,273 | 69,632 | 158,946 | 135,217 |
| Cost of revenue: | ||||
| Product | 3,505 | 3,856 | 6,427 | 7,150 |
| Service and other | 22,473 | 17,943 | 43,594 | 34,748 |
| Total cost of revenue | 25,978 | 21,799 | 50,021 | 41,898 |
| Gross margin | 55,295 | 47,833 | 108,925 | 93,319 |
| Research and development | 8,504 | 7,917 | 16,650 | 15,461 |
| Sales and marketing | 6,584 | 6,440 | 12,301 | 12,157 |
| General and administrative | 1,932 | 1,823 | 3,738 | 3,496 |
| Operating income | 38,275 | 31,653 | 76,236 | 62,205 |
| Other income (expense), net | 9,971 | -2,288 | 6,311 | -2,571 |
| Income before income taxes | 48,246 | 29,365 | 82,547 | 59,634 |
| Provision for income taxes | 9,788 | 5,257 | 16,342 | 10,859 |
| Net income | $38,458 | $24,108 | $66,205 | $48,775 |
| Earnings per share: | ||||
| Basic | $5.18 | $3.24 | $8.91 | $6.56 |
| Diluted | $5.16 | $3.23 | $8.87 | $6.53 |
| Weighted average shares outstanding: | ||||
| Basic | 7,431 | 7,435 | 7,432 | 7,434 |
| Diluted | 7,460 | 7,468 | 7,463 | 7,469 |
BALANCE SHEETS (In millions) (Unaudited)
| December 31, | June 30, | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $24,296 | $30,242 |
| Short-term investments | 65,166 | 64,323 |
| Total cash, cash equivalents, and | 89,462 | 94,565 |
| short-term investments | ||
| Accounts receivable, net of allowance | 56,535 | 69,905 |
| for doubtful accounts of $729 and $944 | ||
| Inventories | 1,059 | 938 |
| Other current assets | 33,134 | 25,723 |
| Total current assets | 180,190 | 191,131 |
| Property and equipment, net of | ||
| accumulated depreciation of $104,950 and | 261,126 | 204,966 |
| $93,653 | ||
| Operating lease right-of-use assets | 25,103 | 24,823 |
| Equity and other investments | 21,202 | 15,405 |
| Goodwill | 119,622 | 119,509 |
| Intangible assets, net | 20,289 | 22,604 |
| Other long-term assets | 37,770 | 40,565 |
| Total assets | $665,302 | $619,003 |
| Liabilities and stockholders’ equity | ||
| Current liabilities: | ||
| Accounts payable | $37,328 | $27,724 |
| Current portion of long-term debt | 4,837 | 2,999 |
| Accrued compensation | 10,103 | 13,709 |
| Short-term income taxes | 2,050 | 7,211 |
| Short-term unearned revenue | 51,376 | 64,555 |
| Other current liabilities | 24,311 | 25,020 |
| Total current liabilities | 130,005 | 141,218 |
| Long-term debt | 35,425 | 40,152 |
| Long-term income taxes | 27,256 | 25,986 |
| Long-term unearned revenue | 2,668 | 2,710 |
| Deferred income taxes | 2,876 | 2,835 |
| Operating lease liabilities | 17,345 | 17,437 |
| Other long-term liabilities | 58,852 | 45,186 |
| Total liabilities | 274,427 | 275,524 |
| Commitments and contingencies | ||
| Stockholders’ equity: | ||
| Common stock and paid-in capital – | ||
| shares authorized 24,000; outstanding | 112,788 | 109,095 |
| 7,429 and 7,434 | ||
| Retained earnings | 280,789 | 237,731 |
| Accumulated other comprehensive loss | -2,702 | -3,347 |
| Total stockholders’ equity | 390,875 | 343,479 |
| Total liabilities and stockholders’ | $665,302 | $619,003 |
| equity |