Microsoft Corporation
Microsoft Corp. develops and sells software, cloud services, devices, and digital platforms for consumers, businesses, developers, and public-sector customers. Its business is organized around productivity software, cloud infrastructure and AI services, and personal computing products such as Windows, Xbox, and Surface.
Fiscal year 2026 · change from previous year
Development 2021–2026
Business
Share of revenueOffice, Microsoft 365, LinkedIn, and Dynamics software/services for work and collaboration.
Azure, server products, GitHub, Nuance Healthcare cloud, and related cloud services.
Windows, Devices, Gaming, and search/news advertising products for consumers and OEMs.
Products
Reported · share of revenue- Server Products and Cloud Services39.0 %
- Microsoft 365 Commercial Products and Cloud Services30.7 %
- XBOX6.6 %
- Linked In Corporation6.0 %
- Windows and Devices5.1 %
- Other12.6 %
Source: 10-K FY2026, revenue the company reports per product line (SEC XBRL). Shares are of the lines shown and add up to 100 %.
Customers
Microsoft sells to individual consumers, small and medium businesses, large enterprises, public-sector institutions, service providers, application developers, and OEMs. Demand is driven by productivity, collaboration, cloud migration, security, AI adoption, and device/software preinstallation across both direct and channel routes.
Buy Microsoft 365 Commercial, Azure, security, and Dynamics through enterprise agreements for scale and integration.
Buy cloud subscriptions and productivity tools to access enterprise-grade software without heavy IT overhead.
Buy Microsoft 365 Consumer, Windows, storage, and gaming content for personal productivity and entertainment.
Buy productivity, cloud, and security solutions for regulated and mission-critical workloads.
Use Azure, GitHub, Visual Studio, and server tools to build and deploy software.
Preinstall Windows and related Microsoft software on PCs and servers, supporting distribution at scale.
Strategy
Microsoft is prioritizing AI-enabled cloud growth, especially through Azure and Microsoft 365 Copilot, while expanding capacity to support datacenters and training infrastructure. It is also pushing subscription conversion, installed-base expansion, and capital returns through dividends and buybacks.
Cloud and AI demand require more compute, datacenter capacity, and platform breadth to sustain growth.
AI features increase product value, support pricing, and deepen customer lock-in across productivity workflows.
Shifting from on-premises licenses to cloud subscriptions improves recurring revenue and customer retention.
New user groups and growth markets broaden the addressable market and support long-term seat growth.
Geography
Microsoft has a global operating footprint, with international operations contributing a significant portion of revenue and expenses. The company does not provide a country revenue table in the excerpts here, but it explicitly notes exposure to foreign exchange, trade policy, and supply-chain disruptions across global markets.
Risks
Microsoft faces intense competition across software, cloud, devices, gaming, and digital advertising, so product relevance and pricing power matter across every segment. Its biggest company-specific risks in the excerpts are cybersecurity, data privacy, platform abuse, foreign-exchange volatility, and heavy capital needs for cloud and AI infrastructure.
- Cybersecurity, data privacy, and platform abuseImpact: HighLikelihood: High
Microsoft operates large-scale cloud, identity, productivity, and consumer platforms that are attractive targets for attackers and abuse.
Exposure - Intense competition across all product linesImpact: HighLikelihood: Medium
The company competes with software vendors, cloud providers, device makers, and ad platforms in multiple markets.
Exposure - Goodwill and intangible asset impairmentImpact: MediumLikelihood: High
Acquisitions and business combinations create balance-sheet assets that may later need write-downs.
Exposure: Could create significant charges and affect reported earnings.
- Trade policy and supply-chain disruptionImpact: MediumLikelihood: Medium
Hardware, datacenter buildouts, and global distribution depend on cross-border sourcing and logistics.
Exposure - Foreign exchange volatilityImpact: MediumLikelihood: Low
A significant share of revenue and expenses comes from international operations denominated in non-USD currencies.
Exposure: Reported revenue and expenses can move with USD strength or weakness.
Accounting
Judgemental itemsManagement must decide whether licenses and cloud services are separate obligations or one combined service.
Impact: Affects timing of revenue recognition, especially for Microsoft 365 and Office 365.
Cloud services integrated with desktop applications are recognized over time rather than upfront.
Impact: Smooths revenue and defers recognition versus perpetual licenses.
Revenue is generally higher in the fourth fiscal quarter due to multi-year contract timing.
Impact: Quarterly comparisons can be distorted without seasonal context.
Acquisitions create assets that may later be written down if expected cash flows weaken.
Impact: Can cause large non-cash charges to operating results.
Legal claims and tax positions depend on management judgment and external outcomes.
Impact: Can materially affect liabilities and earnings.
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Last updated: 24/09/2026