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Microsoft (MSFT) Q2 FY26 earnings results (second quarter fiscal 2026)
10-Q filed Jan 28, 2026
Microsoft (MSFT) reported revenue of $81.3B for the second quarter fiscal 2026 (Q2 FY26), +17% from a year earlier and +5% from the quarter before. Operating margin was 47.1%, net earnings $38.5B (47.3% of revenue).
Microsoft, Q2 FY26: revenue $81.3B (+17% year over year), operating margin 47.1%, net earnings $38.5B, operating cash flow $35.8B. The chart follows the revenue to costs, profit and cash.
| Q2 FY26 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $81.3B | +5% | +17% |
| Gross profit | $55.3B | +3% | +16% |
| Operating profit | $38.3B | +0.8% | +21% |
| Net earnings | $38.5B | +39% | +60% |
| Operating cash flow | $35.8B | -21% | +60% |
| Free cash flow | $5.9B | -77% | -9% |
What changed
Revenue was $81.3B in Q2 FY26, up 17% year over year and up 5% from the previous quarter. Server Products and Cloud Services was the largest line at 38% of revenue. Server Products and Cloud Services added $7.2B year over year (up 31%), 62% of the total change. Other Products and Services declined 40%.
Gross margin was 68.0%, down 0.7 points from a year earlier. Operating profit was $38.3B, a 47.1% margin (up 1.6 points year over year). Of the extra revenue versus a year earlier, 57% reached operating profit, above the 45% margin then. Operating expenses grew 5% against revenue growth of 17%. Net earnings were $38.5B, up 60% year over year. The effective tax rate was 20.3%. Non-operating items added $10.0B, 21% of pre-tax earnings, so the bottom line overstates operating performance.
Operating cash flow was $35.8B (up 60% year over year), 93% of net earnings. Non-cash charges added back $9.1B of depreciation and amortization and $3.2B of share-based compensation. Working capital and other items used $15.0B. Capital expenditures of $29.9B left free cash flow of $5.9B.
Questions
What was Microsoft's revenue in the second quarter fiscal 2026?
Microsoft (MSFT) reported revenue of $81.3B for the second quarter fiscal 2026 (Q2 FY26), +17% from a year earlier and +5% from the quarter before.
Was Microsoft profitable in the second quarter fiscal 2026?
Operating profit was $38.3B (47.1% of revenue) and net earnings $38.5B.
Source: Microsoft 10-Q on SEC EDGAR.