Microsoft said in its quarterly report filed on 28 October 2026 that, as of 30 September, it had additional leases, primarily for datacenters, that had not yet commenced of $364.6 billion. Its annual report put the same figure at $329.1 billion as of 30 June.
The September quarterly report puts Microsoft’s cash, cash equivalents and short-term investments at $64.5 billion on 30 September, down from $76.8 billion on 30 June. By our arithmetic, the leases that have not yet started are about 5.7 times that cash.
A vertical news Short narrated from the published headlines and opening lines of this piece and two related FourWeekMBA pieces on Microsoft.
Business Pill · Free Cash Flow
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The key insight: By our arithmetic from Microsoft’s filings, its leases that have been signed but not yet started, $364.6 billion, are about 5.7 times its $64.5 billion of cash, cash equivalents and short-term investments.
Microsoft’s filings put leases not yet commenced at $105.4 billion on 31 December 2024 and $99.2 billion on 31 March 2025, each the sum of the operating and finance figures the filings gave separately, then $92.7 billion on 30 June 2025, $106.2 billion on 30 September 2025, $155.1 billion on 31 December 2025, $196.6 billion on 31 March 2026, $329.1 billion on 30 June 2026 and $364.6 billion on 30 September 2026.
Over the same quarter-ends, the filings put cash, cash equivalents and short-term investments at $71.6 billion, $79.6 billion, $94.6 billion, $102.0 billion, $89.5 billion, $78.3 billion, $76.8 billion and $64.5 billion. By our arithmetic, the lease figure is about 3.4 times its level a year earlier, while cash is about 37% below its September 2025 level.
The September report says these leases will commence between fiscal year 2027 and fiscal year 2034, with lease terms of 1 year to 20 years, and that some arrangements are subject to certain contractual conditions being met.
Microsoft leases signed but not yet commenced, and cash, cash equivalents and short-term investments, $ billions, quarter-ends December 2024 to September 2026. December 2024 and March 2025 lease figures are the sum of the operating and finance amounts the filings gave separately; the 5.7x multiple is our arithmetic. Sources: Microsoft Forms 10-Q and 10-K.
The Leases Already on the Books
Separately, the September report puts total finance lease liabilities at $71.0 billion, up from $66.6 billion on 30 June, and total operating lease liabilities at $27.5 billion, up from $21.9 billion. Operating lease right-of-use assets rose to $30.2 billion from $24.2 billion.
Total debt was $35.5 billion on 30 September, against $40.3 billion on 30 June, and the cash flow statement shows $4.85 billion of debt repayments in the quarter. By our arithmetic, finance lease liabilities are now about twice Microsoft’s total debt.
The report also shows total finance lease cost of $2.47 billion in the quarter, against $1.72 billion a year earlier, and operating lease cost of $1.89 billion, against $1.66 billion. By our arithmetic, finance lease cost rose about 44%.
Against Meta and Alphabet
Meta’s quarterly report, filed on 22 October 2026, says its operating and finance leases that had not yet commenced as of 30 September 2026 were approximately $355.73 billion. By our arithmetic, Microsoft’s $364.6 billion is about $8.9 billion higher on the same date.
Alphabet’s third-quarter results release puts its cash, cash equivalents and marketable securities at $265.1 billion on 30 September 2026, against $126.8 billion on 31 December 2025. By our arithmetic, Microsoft’s $64.5 billion is about a quarter of that.
The filings show unstarted leases of $92.7 billion against $94.6 billion of cash in June 2025, and $106.2 billion against $102.0 billion in September 2025; by our arithmetic, unstarted leases are now about 3.4 times their September 2025 level, while cash is about 37% lower.
The leases already on the balance sheet are growing too: the September report puts total finance lease liabilities at $71.0 billion, which by our arithmetic is about twice Microsoft’s $35.5 billion of total debt.
On the same date, Meta’s 10-Q put its own unstarted leases at approximately $355.73 billion; by our arithmetic, Microsoft’s figure is about $8.9 billion higher.
Microsoft Form 10-Q, quarter to 30 September 2026, leases note
“These leases will commence between fiscal year 2027 and fiscal year 2034 with lease terms of 1 year to 20 years”
Three Implications
FOR THE HEADLINE FIGURE Leases not yet commenced were $364.6 billion on 30 September 2026 and $329.1 billion on 30 June 2026, according to Microsoft’s filings.
FOR THE CASH PILE Cash, cash equivalents and short-term investments were $64.5 billion on 30 September, down from $76.8 billion on 30 June, and the quarter included $4.85 billion of debt repayments, according to the 10-Q.
FOR WHAT IS CONDITIONAL The 10-Q says some of the arrangements are subject to certain contractual conditions being met; it does not say how much.
The framework argues of the AI capex cycle: “It is a sovereign-scale financing problem dressed in tech-company clothing — and the financial architecture is starting to invert.”
Microsoft’s filings give the size of its unstarted lease commitments, $364.6 billion, and the dates over which they start, but not the lessors or the annual cost. The framework was published in May 2026 and does not discuss these figures.
What Is Not Established
The filings do not say who the lessors are, what each lease costs per year, or how much of the $364.6 billion depends on the contractual conditions they mention. The leases have not commenced, so they are not on the balance sheet, and the comparison with cash is our arithmetic, not a measure Microsoft uses.
Cash on its own leaves out operating cash flow; the September report shows $58.0 billion of net cash from operations in the quarter. Any commentary from Microsoft’s earnings call is not included here.
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Microsoft’s leases that have been signed but not yet started rose to $364.6 billion at the end of September, from $329.1 billion in June and $106.2 billion a year earlier, according to its filings. Its cash, cash equivalents and short-term investments fell to $64.5 billion over the same quarter. By our arithmetic, the unstarted leases are about 5.7 times that cash.
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A note on sourcing. All Microsoft figures come from the leases notes, balance sheets, debt notes and cash flow statements in its Forms 10-Q and 10-K for December 2024 through September 2026, the latest filed on 28 October 2026; Meta’s figure from its 10-Q filed on 22 October 2026; Alphabet’s from its third-quarter 2026 results release. Sums, multiples and percentage changes are our arithmetic; linked earlier pieces carry their own sources.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
