Microsoft Corporation · Earnings release · 8-K Exhibit 99

EX-99.1 2 msft-ex99_1.htm EX-99.1 EX-99.1 Exhibit 99.1 Microsoft Cloud and AI Strength Fuels Third Quarter Results REDMOND, Wash. — April 29, 2026 — Microsoft Corp. today announced the following results for the quarter ended March 31, 2026, as compared to the corresponding period of last fiscal year: • Revenue was $82.9 billion and increased 18% (up 15% in constant currency) • T1Operating income was $38.4 billion and increased 20% (up 16% in constant currency) • Net income was $31.8 billion and increased 23% on a GAAP basis, and increased 20% (up 18% in constant currency) on a non-GAAP basis • Diluted earnings per share was $4.27 and increased 23% on a GAAP basis, and increased 21% (up 18% in constant currency) on a non-GAAP basis • Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below “T2We are focused on delivering cloud and AI infrastructure and solutions that empower every business to eval-max their outcomes in the agentic computing era,” said Satya Nadella, chairman and chief executive officer of Microsoft. “T3Our AI business surpassed an annual revenue run rate of $37 billion, up 123% year-over-year.” “We delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

The following table reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year. Three Months Ended March 31,   2026   2025   Percentage Change Y/Y  ($ in millions, except per share amounts) As Reported (GAAP) Adjustment* As Adjusted (non-GAAP)   As Reported (GAAP) Adjustment* As Adjusted (non-GAAP)   GAAP Constant Currency Non-GAAP Non-GAAP Constant Currency Net Income $31,778 $14 $31,792   $25,824 $583 $26,407   23% 20% 20% 18% Diluted Earnings per Share $4.27 $0.00 $4.27   $3.46 $0.08 $3.54   23% 21% 21% 18% *Adjustment is the impact from investments in OpenAI Business Highlights Microsoft Cloud revenue was $54.5 billion and increased 29% (up 25% in constant currency), and T4commercial remaining performance obligation increased 99% to $627 billion.

Revenue in Productivity and Business Processes was $35.0 billion and increased 17% (up 13% in constant currency), with the following business highlights: • T5Microsoft 365 Commercial cloud revenue increased 19% (up 15% in constant currency) • Microsoft 365 Consumer cloud revenue increased 33% (up 29% in constant currency) • LinkedIn revenue increased 12% (up 9% in constant currency) • Dynamics 365 revenue increased 22% (up 17% in constant currency)     Revenue in Intelligent Cloud was $34.7 billion and increased 30% (up 28% in constant currency), with the following business highlights: • T6Azure and other cloud services revenue increased 40% (up 39% in constant currency) T7Revenue in More Personal Computing was $13.2 billion and decreased 1% (down 3% in constant currency), with the following business highlights: • Windows OEM and Devices revenue decreased 2% (down 3% in constant currency) • Xbox content and services revenue decreased 5% (down 7% in constant currency) • Search advertising revenue excluding traffic acquisition costs increased 12% (up 9% in constant currency) T8Microsoft returned $10.2 billion to shareholders in the form of dividends and share repurchases in the third quarter of fiscal year 2026.

Business Outlook Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast. Quarterly Highlights, Product Releases, and Customer Stories Every quarter Microsoft delivers hundreds of products, services, and enhancements. These releases are driven by years of significant research and development investments, to empower customers with greater productivity, security, and differentiated value. This momentum is reflected in stories that showcase how our technology is shaping industries and driving customer success . We share innovation updates on our product blogs across Azure , Microsoft 365 , and more on our Official Microsoft blog . Webcast Details Satya Nadella, chairman and chief executive officer, Amy Hood, executive vice president and chief financial officer, Alice Jolla, chief accounting officer, Brian DeFoe, deputy general counsel and corporate secretary, and Jonathan Neilson, vice president of investor relations, will host a conference call and webcast at 2:30 p.m.

Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor . Participants can also dial into the conference call at (877) 407-0666 or +1 (201) 689-8023 for international, no password required. The webcast will be available for replay through the close of business on April 29, 2027. Non-GAAP Definition Impact from investments in OpenAI. In the third quarter of fiscal year 2026, net losses from investments in OpenAI resulted in a decrease in net income of $14 million and had minimal impact on earnings per share. In the third quarter of fiscal year 2025, net income and diluted earnings per share were impacted by net losses from investments in OpenAI, which resulted in a decrease in net income and diluted earnings per share of $583 million and $0.08, respectively.

Microsoft has provided non-GAAP financial measures related to the impact from investments in OpenAI to aid investors in better understanding our performance. Microsoft believes these non-GAAP measures assist investors by providing additional insight into its operational performance and help clarify trends affecting its business. For comparability of reporting, management considers non-GAAP measures in conjunction with GAAP financial results in evaluating business performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.     Constant Currency Microsoft presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.

To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft has provided this non-GAAP financial information to aid investors in better understanding our performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. Financial Performance Constant Currency Reconciliation Three Months Ended March 31,   2026   2025   Percentage Change Y/Y   Percentage Change Y/Y  ($ in millions, except per share amounts) As Reported (GAAP) As Adjusted (non-GAAP)   As Reported (GAAP) As Adjusted (non-GAAP)   GAAP Non-GAAP Constant Currency Impact Constant Currency Non-GAAP Constant Currency Revenue $82,886 -   $70,066 -   18% - $2,067 15% - Operating Income $38,398 -   $32,000 -   20% - $1,300 16% - Net Income $31,778 $31,792   $25,824 $26,407   23% 20% $740 20% 18% Diluted Earnings per Share $4.27 $4.27   $3.46 $3.54   23% 21% $0.10 21% 18% Segment Revenue Constant Currency Reconciliation Three Months Ended March 31,       2026   2025   Percentage Change Y/Y   Percentage Change Y/Y ($ in millions) As Reported (GAAP)   As Reported (GAAP)   GAAP Constant Currency Impact Constant Currency Productivity and Business Processes $35,013   $29,944   17% $1,325 13% Intelligent Cloud $34,681   $26,751   30% $506 28% More Personal Computing $13,192   $13,371   (1)% $235 (3)% Selected Product and Service Information Constant Currency Reconciliation Three Months Ended March 31, 2026       Percentage Change Y/Y (GAAP) Constant Currency Impact Percentage Change Y/Y Constant Currency Microsoft Cloud revenue 29% (4)% 25% Commercial remaining performance obligation 99% 0% 99% Microsoft 365 Commercial cloud revenue 19% (4)% 15% Microsoft 365 Consumer cloud revenue 33% (4)% 29% LinkedIn revenue 12% (3)% 9% Dynamics 365 revenue 22% (5)% 17% Azure and other cloud services revenue 40% (1)% 39% Windows OEM and Devices revenue (2)% (1)% (3)% Xbox content and services revenue (5)% (2)% (7)% Search advertising revenue excluding traffic acquisition costs 12% (3)% 9%   About Microsoft Microsoft (Nasdaq “MSFT” @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers.

The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more. Forward-Looking Statements Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as: • intense competition in all of our markets that could adversely affect our results of operations; • focus on cloud-based and AI services presenting execution and competitive risks;     • significant investments in products and services that may not achieve expected returns; • acquisitions, joint ventures, and strategic alliances that could have an adverse effect on our business; • cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position; • disclosure and misuse of personal data that could cause liability and harm to our reputation; • the possibility that we may not be able to protect information in our products and services from use by others; • abuse of our advertising, professional, marketplace, or gaming platforms that may harm our reputation or user engagement; • products and services, how they are used by customers, and how third-party products and services interact with them, presenting security, privacy, and execution risks; • issues about the use of AI in our offerings that may result in reputational or competitive harm, or liability; • excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure; • supply or quality problems; • potential consequences of new, existing, and evolving legal and regulatory requirements; • claims against us that could result in adverse outcomes in legal disputes; • uncertainties relating to our business with government customers; • additional tax liabilities; • an inability to protect and utilize our intellectual property may harm our business and operating results; • claims that Microsoft has infringed the intellectual property rights of others; • damage to our reputation or our brands that may harm our business and results of operations; • adverse economic or market conditions that could harm our business; • catastrophic events or geopolitical conditions, such as the COVID-19 pandemic, that could disrupt our business; • exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange; and • the dependence of our business on our ability to attract and retain talented employees.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/en-us/investor . All information in this release is as of March 31, 2026. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, press only: Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777, rrt@we-worldwide.com     For more information, financial analysts and investors only: Jonathan Neilson, Vice President, Investor Relations, (425) 706-4400 Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news . Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at http://www.microsoft.com/en-us/investor .     MICROSOFT CORPORATION   INCOME STATEMENTS (In millions, except per share amounts) (Unaudited)     Three Months Ended March 31,   Nine Months Ended March 31,   2026   2025   2026   2025                                     Revenue:                 Product   $15,089   $15,319   $47,462   $46,810 Service and other   67,797   54,747   194,370   158,473                                     Total revenue   82,886   70,066   241,832   205,283                                     Cost of revenue:                 Product   2,733   3,037   9,160   10,187 Service and other   24,095   18,882   67,689   53,630                                     Total cost of revenue   26,828   21,919   76,849   63,817                                     Gross margin   56,058   48,147   164,983   141,466 Research and development   8,915   8,198   25,565   23,659 Sales and marketing   6,814   6,212   19,115   18,369 General and administrative   1,931   1,737   5,669   5,233                                     Operating income   38,398   32,000   114,634   94,205 Other income (expense), net   942   (623)   7,253   (3,194)                                     Income before income taxes   39,340   31,377   121,887   91,011 Provision for income taxes   7,562   5,553   23,904   16,412                                     Net income   $31,778   $25,824   $97,983   $74,599                                     Earnings per share:                 Basic   $4.28   $3.47   $13.19   $10.03 Diluted   $4.27   $3.46   $13.14   $9.99                   Weighted average shares outstanding:                 Basic   7,426   7,434   7,430   7,434 Diluted   7,445   7,461   7,457   7,466                         COMPREHENSIVE INCOME STATEMENTS (In millions) (Unaudited)     Three Months Ended   Nine Months Ended   March 31,   March 31,   2026   2025   2026   2025                                     Net income   $31,778   $25,824   $97,983   $74,599                                     Other comprehensive income (loss), net of tax:                 Net change related to derivatives   0   (20)   (6)   4 Net change related to investments   (239)   450   287   1,130 Translation adjustments and other   (287)   353   (162)   (377)                                     Other comprehensive income (loss)   (526)   783   119   757                                     Comprehensive income   $31,252   $26,607   $98,102   $75,356                         BALANCE SHEETS (In millions) (Unaudited)     March 31, 2026   June 30, 2025                     Assets         Current assets:         Cash and cash equivalents   $32,105   $30,242 Short-term investments   46,167   64,323                     Total cash, cash equivalents, and short-term investments   78,272   94,565 Accounts receivable, net of allowance for doubtful accounts of $794  and $944   60,041   69,905 Inventories   1,219   938 Other current assets   35,797   25,723                     Total current assets   175,329   191,131 Property and equipment, net of accumulated depreciation of $111,723 and $93,653   283,228   204,966 Operating lease right-of-use assets   24,403   24,823 Equity and other investments   33,683   15,405 Goodwill   119,661   119,509 Intangible assets, net   19,325   22,604 Other long-term assets   38,599   40,565                     Total assets   $694,228   $619,003                     Liabilities and stockholders' equity         Current liabilities:         Accounts payable   $37,513   $27,724 Current portion of long-term debt   8,839   2,999 Accrued compensation   11,270   13,709 Short-term income taxes   3,563   7,211 Short-term unearned revenue   50,924   64,555 Other current liabilities   24,552   25,020                     Total current liabilities   136,661   141,218 Long-term debt   31,423   40,152 Long-term income taxes   27,941   25,986 Long-term unearned revenue   2,753   2,710 Deferred income taxes   2,899   2,835 Operating lease liabilities   16,703   17,437 Other long-term liabilities   61,481   45,186                     Total liabilities   279,861   275,524                     Commitments and contingencies         Stockholders' equity:         Common stock and paid-in capital - shares authorized 24,000; outstanding 7,429  and 7,434   115,069   109,095 Retained earnings   302,526   237,731 Accumulated other comprehensive loss   (3,228)   (3,347)                     Total stockholders' equity   414,367   343,479                     Total liabilities and stockholders' equity   $694,228   $619,003                 CASH FLOWS STATEMENTS (In millions) (Unaudited)     Three Months Ended   Nine Months Ended   March 31,   March 31,   2026   2025   2026   2025                                     Operations                 Net income   $31,778   $25,824   $97,983   $74,599 Adjustments to reconcile net income to net cash from operations:                 Depreciation, amortization, and other   10,167   7,734   27,512   20,116 Stock-based compensation expense   3,081   2,980   9,283   8,901 Net recognized losses (gains) on investments and derivatives   (1,280)   708   (7,304)   3,387 Deferred income taxes   2,602   (2,244)   9,539   (4,835) Changes in operating assets and liabilities:                 Accounts receivable   (4,707)   (2,461)   8,347   5,598 Inventories   (161)   52   (283)   390 Other current assets   758   1,076   215   642 Other long-term assets   (932)   (518)   (2,614)   (3,368) Accounts payable   2,320   1,179   2,903   1,221 Unearned revenue   (166)   (1,032)   (13,067)   (12,923) Income taxes   2,296   1,298   (1,568)   (1,081) Other current liabilities   2,539   2,839   (166)   576 Other long-term liabilities   (1,616)   (391)   (3,286)   292                                     Net cash from operations   46,679   37,044   127,494   93,515                                     Financing                 Repayments of debt, maturities of 90 days or less   0   0   0   (5,746) Repayments of debt   0   (2,250)   (3,000)   (3,216) Common stock issued   541   546   1,489   1,508 Common stock repurchased   (4,627)   (4,781)   (17,692)   (13,874) Common stock cash dividends paid   (6,756)   (6,169)   (19,687)   (17,913) Other, net   (509)   (382)   (1,877)   (1,614)                                     Net cash used in financing   (11,351)   (13,036)   (40,767)   (40,855)                                     Investing                 Additions to property and equipment   (30,876)   (16,745)   (80,146)   (47,472) Acquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets   (258)   (981)   (1,291)   (4,235) Purchases of investments   (12,006)   (4,474)   (39,522)   (8,144) Maturities of investments   11,976   6,721   30,424   11,461 Sales of investments   6,358   2,161   15,311   6,688 Other, net   (2,599)   604   (9,445)   (325)                                     Net cash used in investing   (27,405)   (12,714)   (84,669)   (42,027)                                     Effect of foreign exchange rates on cash and cash equivalents   (114)   52   (195)   (120)                                     Net change in cash and cash equivalents   7,809   11,346   1,863   10,513 Cash and cash equivalents, beginning of period   24,296   17,482   30,242   18,315                                     Cash and cash equivalents, end of period   $32,105   $28,828   $32,105   $28,828                   We have recast certain prior period amounts to conform to the current period presentation.     SEGMENT RESULTS (In millions) (Unaudited)     Three Months Ended   Nine Months Ended   March 31,   March 31,   2026   2025   2026   2025                                     Productivity and Business Processes                                   Revenue   $35,013   $29,944   $102,149   $87,698 Cost of revenue   6,197   5,517   18,028   16,380 Operating expenses   7,843   7,048   22,142   20,538                                     Operating income   $20,973   $17,379   $61,979   $50,780                                     Intelligent Cloud                                   Revenue   $34,681   $26,751   $98,485   $76,387 Cost of revenue   15,120   10,307   41,000   28,326 Operating expenses   5,808   5,349   16,468   15,612                                     Operating income   $13,753   $11,095   $41,017   $32,449                                     More Personal Computing                                   Revenue   $13,192   $13,371   $41,198   $41,198 Cost of revenue   5,511   6,095   17,821   19,111 Operating expenses   4,009   3,750   11,739   11,111                                     Operating income   $3,672   $3,526   $11,638   $10,976                                     Total                                   Revenue   $82,886   $70,066   $241,832   $205,283 Cost of revenue   26,828   21,919   76,849   63,817 Operating expenses   17,660   16,147   50,349   47,261                                     Operating income   $38,398   $32,000   $114,634   $94,205