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Microsoft cash flow, quarter by quarter

Latest: Q1 FY27 · from the cash-flow statements filed with the SEC

Free cash flow$18.6B in Q1 FY27 · $60.0B over twelve months

Operating cash flow$58.0B
Capital spending−$39.4B
Free cash flow+$18.6B
Cash / net income1.6×
Cash conversion cycle-55 days

Analysis

In Q1 FY27, Microsoft generated $58.0B of operating cash flow and spent $39.4B on capital projects, leaving free cash flow of $18.6B. That is $7.0B less than in Q1 FY26 ($25.7B).

Over the twelve months to Sep 30, 2026, operating cash flow was $195.9B; the largest uses were capital spending ($135.9B), dividends ($27.0B), buybacks ($21.0B); besides operations, cash came from shares issued ($1.9B); the cash balance fell by $8.6B.

Operating cash flow was $58.0B against net income of $36.6B — 1.6× profit, cash ran ahead of reported earnings. The largest differences: receivables +$17.1B, depreciation & amortization +$12.1B, deferred revenue −$5.9B.

Its cash conversion cycle was -55 days (receivables 71 + inventory 5 − payables 132): suppliers fund its working capital.

Free cash flow

Microsoft: free cash flow by quarterMicrosoft: free cash flow by quarter$6.5BQ2 FY25$20.3BQ3 FY25$25.6BQ4 FY25$25.7BQ1 FY26$5.9BQ2 FY26$15.8BQ3 FY26$19.6BQ4 FY26$18.6BQ1 FY27
Operating cash flow less capital spending.
Microsoft: operating cash flow against capital spendingMicrosoft: operating cash flow against capital spendingOperating cash flowCapital spending$22.3B$15.8BQ2 FY25$37.0B$16.7BQ3 FY25$42.6B$17.1BQ4 FY25$45.1B$19.4BQ1 FY26$35.8B$29.9BQ2 FY26$46.7B$30.9BQ3 FY26$55.4B$35.8BQ4 FY26$58.0B$39.4BQ1 FY27
Latest (Q1 FY27): Operating cash flow $58.0B, Capital spending $39.4B.

Capital allocation, year by year

Microsoft: where the cash came from (up) and went (down), by fiscal yearMicrosoft: where the cash came from (up) and went (down), by fiscal yearOperating cash flowNet borrowingShares issuedCapital spendingBuybacksDividendsFY22: Operating cash flow $89.0BFY22: Net borrowing −$9.0BFY22: Shares issued $1.8BFY22: Capital spending −$23.9BFY22: Buybacks −$32.7BFY22: Dividends −$18.1B$90.9BFY22FY23: Operating cash flow $87.6BFY23: Net borrowing −$2.8BFY23: Shares issued $1.9BFY23: Capital spending −$28.1BFY23: Buybacks −$22.2BFY23: Dividends −$19.8B$89.4BFY23FY24: Operating cash flow $118.5BFY24: Net borrowing $575MFY24: Shares issued $2.0BFY24: Capital spending −$44.5BFY24: Buybacks −$17.3BFY24: Dividends −$21.8B$121.1BFY24FY25: Operating cash flow $136.2BFY25: Net borrowing −$9.0BFY25: Shares issued $2.1BFY25: Capital spending −$64.6BFY25: Buybacks −$18.4BFY25: Dividends −$24.1B$138.2BFY25FY26: Operating cash flow $182.9BFY26: Net borrowing −$3.1BFY26: Shares issued $2.0BFY26: Capital spending −$115.9BFY26: Buybacks −$22.3BFY26: Dividends −$26.4B$184.9BFY26
Over these 5 years operating cash flow totalled $614.3B; the largest uses were capital spending ($277.0B) and buybacks ($112.9B). Cash-flow statements as filed.

Cash runway and the debt wall

Cash & investments$64.5B
Debt$35.5B
Net cash$29.0B
Due within a year$9.2B

Microsoft funds itself: free cash flow was $60.0B over the last twelve months, and $64.5B of cash and investments stands against $35.5B of debt ($9.2B due within a year, 7.0× covered by cash).

Microsoft: debt maturities by year (FY26)Microsoft: debt maturities by year (FY26)$9.2BYear 1$2.0BYear 3$500MYear 5$34.4BAfter year 5
Principal due in each year as disclosed in the annual report, against $64.5B of cash and investments now.

Where the cash came from and went

Microsoft: sources (+) and uses (−) of cash, Q1 FY27Microsoft: sources (+) and uses (−) of cash, Q1 FY27Operating cash flow$58.0BCapital spending−$39.4BDividends−$6.8BNet borrowing (+) / repaid (−)−$4.8BBuybacks−$4.4BOther investing−$2.6BOther financing−$1.3BCash drawn (+) / kept (−)$654MShares issued$598MExchange rates−$49.0M
Microsoft: sources (+) and uses (−) of cash, TTM to Q1 FY27Microsoft: sources (+) and uses (−) of cash, TTM to Q1 FY27Operating cash flow$195.9BCapital spending−$135.9BDividends−$27.0BBuybacks−$21.0BOther investing−$11.0BCash drawn (+) / kept (−)$8.6BNet borrowing (+) / repaid (−)−$7.8BOther financing−$3.4BShares issued$1.9BExchange rates−$153M

From profit to cash

Microsoft: net income to operating cash flow, Q1 FY27Microsoft: net income to operating cash flow, Q1 FY27Net income$36.6BDepreciation & amortization$12.1BStock-based pay$3.1BDeferred taxes$4.6BGains on investments$46.0MReceivables$17.1BInventory−$436MPayables$525MDeferred revenue−$5.9BPrepaid and other assets−$1.9BOther liabilities−$4.5BIncome taxes payable−$556MOperating cash flow$58.0B
Non-cash charges are added back; money tied up in receivables or inventory is subtracted.
QuarterReceivable daysInventory daysPayable daysCash conversion cycle
Q1 FY27715132-55
Q4 FY26714123-48
Q3 FY26634126-58
Q2 FY26624124-58
Q1 FY26734115-39
Q4 FY25723102-26
Q3 FY25644100-33
Q2 FY2561596-29

Every quarter

QuarterOperating cash flowCapital spendingBuybacksDividendsNet borrowing (+) / repaid (−)Shares issuedCash drawn (+) / kept (−)Free cash flow
Q1 FY27$58.0B−$39.4B−$4.4B−$6.8B−$4.8B$598M$654M$18.6B
Q4 FY26$55.4B−$35.8B−$4.6B−$6.8B—$520M$11.2B$19.6B
Q3 FY26$46.7B−$30.9B−$4.6B−$6.8B—$541M−$7.8B$15.8B
Q2 FY26$35.8B−$29.9B−$7.4B−$6.8B−$3.0B$259M$4.6B$5.9B
Q1 FY26$45.1B−$19.4B−$5.7B−$6.2B—$689M$1.4B$25.7B
Q4 FY25$42.6B−$17.1B−$4.5B−$6.2B—$548M−$1.4B$25.6B
Q3 FY25$37.0B−$16.7B−$4.8B−$6.2B−$2.2B$546M−$11.3B$20.3B
Q2 FY25$22.3B−$15.8B−$5.0B−$6.2B—$256M$3.4B$6.5B

Microsoft: income statement and cash flow

Microsoft, Q1 FY27: revenue $92.3B (+19% year over year), operating margin 49.8%. The chart follows the revenue to costs, profit and cash.

Microsoft: every quarter, Q/Q and Y/Y → Open in the app

Read automatically from the company’s XBRL cash-flow statements; quarterly figures for the fourth quarter are the year less the first three. Errors are possible. Not investment advice.