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Microsoft (MSFT) Q1 FY26 earnings results (first quarter fiscal 2026)
10-Q filed Oct 29, 2025
Microsoft (MSFT) reported revenue of $77.7B for the first quarter fiscal 2026 (Q1 FY26), +18% from a year earlier and +2% from the quarter before. Operating margin was 48.9%, net earnings $27.7B (35.7% of revenue).
Microsoft, Q1 FY26: revenue $77.7B (+18% year over year), operating margin 48.9%, net earnings $27.7B, operating cash flow $45.1B. The chart follows the revenue to costs, profit and cash.
| Q1 FY26 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $77.7B | +2% | +18% |
| Gross profit | $53.6B | +2% | +18% |
| Operating profit | $38.0B | +11% | +24% |
| Net earnings | $27.7B | +2% | +12% |
| Operating cash flow | $45.1B | +6% | +32% |
| Free cash flow | $25.7B | +0.4% | +33% |
What changed
Revenue was $77.7B in Q1 FY26, up 18% year over year and up 2% from the previous quarter. Server Products and Cloud Services was the largest line at 37% of revenue. Server Products and Cloud Services added $6.7B year over year (up 30%), 56% of the total change. Other Products and Services declined 70%.
Gross margin was 69.0%, down 0.3 points from a year earlier. Operating profit was $38.0B, a 48.9% margin (up 2.3 points year over year). Of the extra revenue versus a year earlier, 61% reached operating profit, above the 47% margin then. Operating expenses grew 5% against revenue growth of 18%. Net earnings were $27.7B, up 12% year over year. The effective tax rate was 19.1%.
Operating cash flow was $45.1B (up 32% year over year), 162% of net earnings. Non-cash charges added back $8.6B of depreciation and amortization and $3.0B of share-based compensation. Working capital and other items added $5.7B. Capital expenditures of $19.4B left free cash flow of $25.7B.
Questions
What was Microsoft's revenue in the first quarter fiscal 2026?
Microsoft (MSFT) reported revenue of $77.7B for the first quarter fiscal 2026 (Q1 FY26), +18% from a year earlier and +2% from the quarter before.
Was Microsoft profitable in the first quarter fiscal 2026?
Operating profit was $38.0B (48.9% of revenue) and net earnings $27.7B.
Source: Microsoft 10-Q on SEC EDGAR.