Microsoft 8-K
Investor update
New Agents and Infra and Devices and Consumer segments reshape reporting; prior years are recast to match FY2027 resource allocation.
Filed 2026-10-28 16:11 ET
- 8.01 Other Events
- 9.01 Financial Statements and Exhibits
Summary
Microsoft recast FY2024–FY2026 financial information to reflect its new Agents and Infra and Devices and Consumer segments, which align reporting with how management allocates resources and assesses performance beginning in FY2027. The recast changes segment presentation, not Microsoft’s audited consolidated financial statements or consolidated cash flows; it is not a restatement.
Key Figures
| Metric | FY2026 | FY2025 |
|---|---|---|
| Revenue | $332B, +18% Y/Y | $282B, +15% Y/Y |
| Gross margin (% of revenue) | 67.9%, vs 68.8% | 68.8%, vs 69.8% |
| Operating income | $155B, +21% Y/Y | $129B, +17% Y/Y |
| Net income (GAAP) | $134B, +31% Y/Y | $102B, +16% Y/Y |
| Net income (non-GAAP) | $129B, +22% Y/Y | $105B, +18% Y/Y |
| Diluted EPS (GAAP) | $17.95, +32% Y/Y | $13.64, +16% Y/Y |
| Diluted EPS (non-GAAP) | $17.28, +22% Y/Y | $14.13, +18% Y/Y |
| Operating cash flow | $183B, +34% Y/Y | $136B, +15% Y/Y |
- Recast FY2026 revenue was $268.1B in Agents and Infra (+23%) and $63.7B in Devices and Consumer (+1%). Azure revenue grew 40% to $101.9B, while Microsoft 365 cloud grew 19% to $100.3B; Microsoft Cloud revenue rose 27% to $214.4B.
- Devices and Consumer growth was mixed: Search and advertising revenue increased 12%, while Xbox revenue decreased 7% and Windows OEM and devices revenue decreased 1%. Companywide gross margin percentage declined slightly as AI infrastructure investment and AI product usage growth offset efficiency gains.
- Microsoft repurchased $16.7B of shares, or 36M shares, in FY2026. Shares outstanding fell by 7M net, to 7.427B, after 29M shares were issued.
Guidance
No guidance in this filing.
Investor Takeaways
- Track FY2027 Agents and Infra performance against the recast FY2026 base of $268.1B in revenue; continued Azure and Microsoft 365 cloud growth would support the segment’s momentum.
- Watch Devices and Consumer results under the new reporting structure, particularly whether Search and advertising growth offsets declines in Xbox and Windows OEM and devices.
The summary is written by an AI model reading the filing.
Model 005 · prompt v111 · 2026-10-28 22:41:19Z