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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:

Segment Performance:

Shareholder Returns:

General Insights:

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