Earnings review- Microsoft (MSFT) - Q1 2026

Muffett Investments

Earnings Watch · Stock Analysis Division

Earnings Review

27 July 2026

◆  Technology · Software - Infrastructure

Microsoft Corporation

MSFT NMS · Mkt Cap: $2.9T · Q1 FY2026 Results

Report Period

Q1 FY2026

Reported: 2026-04-29

Headline Beat Expectations ✓ Beat Expectations

Key Metrics at a Glance

↑

Revenue Growth

+18.3%

YoY

↑

Operating Margin

46.3%

+66bps YoY

↓

Free Cash Flow

$15.8B

-22.1% YoY

!

Net Position

Net Debt

-$24.9B

↑

EPS (Diluted)

$16.79

N/A

Financial Metrics — Detailed Breakdown

Metric	Q1 FY2026	Q1 FY2025	YoY Change	Consensus Est.	vs. Estimate
Total Revenue	$82.9B	$70.1B	+18.3%	—	N/A
Gross Profit	$56.1B	$48.1B	+16.4%	—	N/A
Gross Margin	67.6%	68.7%	-108bps	—	N/A
Operating Income	$38.4B	$32.0B	+20.0%	—	N/A
Operating Margin	46.3%	45.7%	+66bps	—	N/A
Net Income	$31.8B	$25.8B	+23.1%	—	N/A
Net Margin	38.3%	36.9%	+148bps	—	N/A
Operating Cash Flow	$46.7B	$37.0B	+26.0%	—	N/A
Free Cash Flow	$15.8B	$20.3B	-22.1%	—	N/A
FCF Margin	19.1%	29.0%	-991bps	—	N/A
Total Debt	$57.0B	$60.6B	-5.9%	—	N/A
Cash & Equivalents	$32.1B	$28.8B	+11.4%	—	N/A
Net Cash / (Debt)	-$24.9B	-$31.7B	+21.7%	—	N/A
EPS (Diluted)	$16.79	$N/A	N/A	$—	N/A

⚠  Management Commentary — Signals

• No significant red flags detected in EDGAR filing.

📈  Price Reaction

Pre-Earnings Close

$428.32

2026-04-29

Post-Earnings Price

$423.54

Next trading session

1-Day Move

-1.12%

vs. market

52-Week Range

$349.20 – $555.45

 

−10%0%+10%

Price data sourced from Yahoo Finance. Reaction shown vs. prior trading session close.

Our Verdict

★★★★★

4 / 5 — Beat Expectations

Constructive

Microsoft reported a beat expectations quarter, with revenue grew +18.3% YoY to $82.9B. operating margins expanded by 66bps to 46.3%. Free cash flow came in at $15.8B. The balance sheet remains under watch given the debt load.

• ✓Revenue grew strongly at +18.3% YoY — well above average.
• ✓Operating margin expanded by 66bps YoY — positive operating leverage.
• ✗Free cash flow declined -22.1% YoY — elevated capex or working capital drag.
• →Muted price reaction (-1.1%) — results largely in-line with expectations.

This analysis is produced by Muffett Investments for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Data sourced from Yahoo Finance and SEC EDGAR. Past performance is not indicative of future results.

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