Microsoft’s operating income was $155.2 billion in fiscal 2026 (year to 30 June 2026), up 21%, on revenue of $331.8 billion. Net income was $133.7 billion, up 31%, helped by a $5.0 billion after-tax gain from its OpenAI investment; excluding OpenAI, adjusted net income was $128.8 billion, up 22%. In the quarter to 30 September 2026, operating income rose 21% to $45.9 billion and net income 32% to $36.6 billion.
How Microsoft's profit is built
What changed in 2025-26
Cash from operations was $182.9 billion in fiscal 2026, and additions to property and equipment were $115.9 billion, up from $64.6 billion in fiscal 2025, as Microsoft added datacenters and computer systems.
Microsoft also reports adjusted net income and EPS that exclude OpenAI gains and losses. In the quarter to 30 September 2026 GAAP net income was $36.6 billion and adjusted net income $36.4 billion.
In the quarter to 30 September 2026, Agents and Infra operating income rose to $40.6 billion from $32.7 billion a year earlier, while Devices and Consumer earned $5.4 billion.
Microsoft’s effective tax rate was 19% in fiscal 2026 against 18% in fiscal 2025, mainly because of the mix of earnings between the US and other countries.
Microsoft profit, by period
What it means for you
- Compare operating income across years, not net income: OpenAI gains and losses swing the bottom line.
- Use Microsoft's adjusted net income when you want the trend without the OpenAI stake.
- Read profit next to capital spending; much of the cash now goes into datacenters before it shows up as revenue.
- Watch Microsoft Cloud gross margin: it shows whether AI usage is getting cheaper to serve.
- When you model Microsoft, use the recast two-segment figures so fiscal 2026 and 2027 line up.
Microsoft’s profit engine still runs at software-like margins while it spends on datacenters at an industrial scale. The Business Engineer view: the question for AI-era platforms is whether operating income keeps growing faster than revenue once the new capacity is depreciated.
Read: The AI Capex Map & The State of AI Hyperscalers →Explore everything we publish →Related: Microsoft revenues · Microsoft revenue breakdown · Microsoft business model · OpenAI and Microsoft · Profit margin
Frequently asked questions
How much profit did Microsoft make in fiscal 2026?
Net income was $133.7 billion and operating income $155.2 billion for the year to 30 June 2026.
Why did Microsoft's net income grow faster than operating income?
Net income included a $5.0 billion after-tax gain from OpenAI in fiscal 2026, after a $3.6 billion loss in fiscal 2025; excluding OpenAI, net income grew 22%.
What was Microsoft's latest quarterly profit?
In the quarter to 30 September 2026 operating income was $45.9 billion and net income $36.6 billion.
Which part of Microsoft earns the most?
Agents and Infra, which includes Azure and Microsoft 365 cloud: $136.4 billion of operating income in fiscal 2026 on the recast basis.
Sources
- Microsoft Corporation (2026), Form 10-K for fiscal 2026, SEC
- Microsoft Corporation (28 October 2026), Form 8-K Exhibit 99.1, fiscal 2026 financial information recast to new segments, SEC
- Microsoft Corporation (28 October 2026), First quarter fiscal 2027 results, Form 8-K Exhibit 99.1, SEC
The full guide
The complete explainer, cleaned up and reformatted for mobile.
Microsoft earned $155.2B of operating income in fiscal 2026 (47% margin) and $133.7B of net income. Net income included a $5.0 billion after-tax gain from its OpenAI investment; excluding it, adjusted net income was $128.8 billion (+22%).
Sources: Microsoft Form 10-K for fiscal 2026 (SEC EDGAR). Analysis by The Business Engineer.
How we source: figures on this page come from the company’s own filings (SEC 10-K, 10-Q and earnings releases, or its annual report), with the period stated next to each number. Last refreshed October 2026. Our methodology.
| Figure | Value |
|---|---|
| Operating income, fiscal 2026 filing | $155.2B (47% of revenue) |
| Net income, fiscal 2026 filing | $133.7B |
| Revenue, fiscal 2026 filing | $331.8B |
Source: Microsoft Form 10-K (2026). Microsoft’s fiscal years end 30 June. Calculated figures are labelled.
Company explainer · Microsoft, explained
A 4-minute explainer of Microsoft's business model and latest numbers, built from its SEC filings. Analysis by The Business Engineer.
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More on Microsoft Profits and its peers
Reading Microsoft’s profit
Operating income grew 21% in fiscal 2026, faster than revenue (18%). The margin has climbed from 42% in fiscal 2022 to 47%.
Net income now moves with OpenAI: a $3.6 billion after-tax hit in fiscal 2025, a $5.0 billion gain in fiscal 2026 (mainly a dilution gain from OpenAI’s recapitalization). Microsoft reports adjusted figures excluding these.
Cash: operating cash flow was $182.9B and capex $115.9B. See Microsoft and OpenAI.
Earlier figures and background
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Microsoft generated over $72.3 billion in profits in 2023 compared to $72.7 billion in 2022, over $61 billion in 2021 and $44 billion in 2020.
