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Earnings transcript
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MSFT
Microsoft Corporation
$520.99
13.87
(2.74%)
| Exchange: | NASDAQ |
| Market Cap: | 3.869T |
| Shares Outstanding: | 7.342B |
Delayed data
About The Company
| Sector: | TechnologyView sector performance | |||||
| Industry: | Software – InfrastructureView industry performance | |||||
| CEO: | Satya Nadella | |||||
| Full Time Employees: | 223000 | |||||
| Address: |
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| Website: | https://www.microsoft.com |
Microsoft Corporation is a prominent global technology firm that invents, markets, and provides ongoing assistance for a diverse range of software, digital services, computing devices, and comprehensive solutions. Its operations are organized into three primary divisions: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment delivers crucial tools for both enterprises and individual users. This includes the extensive Office suite (comprising Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, Microsoft Viva, and Skype for Business), along with popular consumer offerings like Skype, Outlook.com, OneDrive, and LinkedIn. It also features Dynamics 365, a suite of integrated cloud and on-premises business applications tailored for organizations. The Intelligent Cloud division focuses on sophisticated infrastructure and platform services. Here, Microsoft licenses key products such as SQL Server, Windows Servers, Visual Studio, System Center, and associated Client Access Licenses. It also includes GitHub, a leading platform for developer collaboration and code hosting; Nuance, offering advanced AI solutions for healthcare and businesses; and Azure, its expansive cloud computing platform. This segment further encompasses enterprise support, Microsoft consulting services, and Nuance professional services, assisting clients with the development, deployment, and management of Microsoft’s server and desktop technologies, alongside offering product training and certification. Finally, the More Personal Computing segment covers a broad spectrum of consumer and commercial computing experiences. It generates revenue through Windows operating system licensing, including agreements with original equipment manufacturers (OEMs), non-volume licensing, and various Windows Commercial offerings (such as volume licensing and cloud services), as well as patent licensing and Windows Internet of Things (IoT). This division also supplies its own hardware, including Surface devices, PC accessories, and gaming/entertainment consoles. Its Gaming portfolio features Xbox hardware, content, and subscription services, in addition to video games and royalties from third-party titles. Furthermore, it manages search services like Bing and Microsoft’s advertising platforms. Microsoft distributes its extensive product line via numerous channels, including original equipment manufacturers, wholesale distributors, and various resellers, complementing direct sales through digital marketplaces, its own online storefronts, and physical retail outlets. The company, established in 1975, maintains its headquarters in Redmond, Washington.
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Revenue Segmentation
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MSFT full analysis
Welcome back to MarketSnap. Microsoft just delivered what one analyst called a near-perfect quarter — revenue up 19%, Azure up 48%, earnings per share up 18% — and the stock is up about 36% in three months. Meanwhile Alphabet lost roughly half a trillion dollars of market value in a single day on the exact same fear: AI spending. So Microsoft has become the safe way to own AI. That's a compliment, and it's a warning. Because when money hides…
Industry Peers
| TICKER | COMPANY | MKT CAP | P/E | FWD P/E | ROIC |
|---|---|---|---|---|---|
| MSFT | Microsoft Corporation | 3.87T | 27.2 | 30.7 | 20.4% |
 PLTR | Palantir Technologies Inc. | 403.5B | 146 | 110 | 25.6% |
 ORCL | Oracle Corporation | 381.6B | 20.2 | 16.9 | 7.7% |
 PANW | Palo Alto Networks, Inc. | 286.6B | 795 | 92.7 | 1.0% |
 CRWD | CrowdStrike Holdings, Inc. | 250.5B | 7,114 | 263 | -1.6% |
 NET | Cloudflare, Inc. | 97.4B | — | 217 | -6.8% |
EPS
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Earnings Call
AI summary
Key takeaways
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Login — it's freeIncome Statement
| Year | 2024 | 2025 | 2026 |
|---|---|---|---|
| Revenue | 245,122,000 | 281,724,000 | 331,839,000 |
| Gross Profit | 171,008,000 | 193,893,000 | 225,465,000 |
| EBITDA | 133,009,000 | 160,165,000 | 207,519,000 |
| Operating Income | 109,433,000 | 128,528,000 | 155,237,000 |
| Net Income | 88,136,000 | 101,832,000 | 133,749,000 |
(* All numbers are in thousands)
Balance Sheet
| Year | 2024 | 2025 | 2026 |
|---|---|---|---|
| Total Assets | 512,163,000 | 619,003,000 | 758,376,000 |
| Total Liabilities | 243,686,000 | 275,524,000 | 315,989,000 |
| Total Stockholders Equity | 268,477,000 | 343,479,000 | 442,387,000 |
| Total Debt | 67,127,000 | 60,588,000 | 128,808,300 |
| Cash and Cash Equivalents | 18,315,000 | 30,242,000 | 20,935,000 |
(* All numbers are in thousands)
Cash Flow Statement
| Year | 2024 | 2025 | 2026 |
|---|---|---|---|
| Operating Cash Flow | 118,548,000 | 136,162,000 | 182,935,000 |
| Capital Expenditure | -44,477,000 | -64,551,000 | -115,948,000 |
| Free Cash Flow | 74,071,000 | 71,611,000 | 66,987,000 |
| Net Income | 88,136,000 | 101,832,000 | 133,749,000 |
| Net Change in Cash | -16,389,000 | 11,927,000 | -9,307,000 |
(* All numbers are in thousands)
Analyst Estimates
| Fiscal Year | 2031 | Research Access | Research Access | Research Access | Research Access |
|---|---|---|---|---|---|
| Estimated Revenue (Low) | 842,344,723.411 | Research Access | Research Access | Research Access | Research Access |
| Estimated Revenue (High) | 944,946,424.607 | Research Access | Research Access | Research Access | Research Access |
| Estimated Revenue (Avg) | 895,981,500 | Research Access | Research Access | Research Access | Research Access |
| Estimated Ebitda (Low) | 490,902,541.801 | Research Access | Research Access | Research Access | Research Access |
| Estimated Ebitda (High) | 553,153,445.632 | Research Access | Research Access | Research Access | Research Access |
| Estimated Ebitda (Avg) | 523,445,262.202 | Research Access | Research Access | Research Access | Research Access |
| Estimated Net Income (Low) | 318,253,608.772 | Research Access | Research Access | Research Access | Research Access |
| Estimated Net Income (High) | 369,629,373.679 | Research Access | Research Access | Research Access | Research Access |
| Estimated Net Income (Avg) | 345,111,165.046 | Research Access | Research Access | Research Access | Research Access |
| Estimated SGA Expense (Low) | 106,970,185.914 | Research Access | Research Access | Research Access | Research Access |
| Estimated SGA Expense (High) | 119,999,676.984 | Research Access | Research Access | Research Access | Research Access |
| Estimated SGA Expense (Avg) | 113,781,572.991 | Research Access | Research Access | Research Access | Research Access |
| Estimated EPS (Avg) | 46.310 | Research Access | Research Access | Research Access | Research Access |
| Estimated EPS (High) | 49.590 | Research Access | Research Access | Research Access | Research Access |
| Estimated EPS (Low) | 42.700 | Research Access | Research Access | Research Access | Research Access |
| Number of Analysts (Estimated Revenue) | 13 | Research Access | Research Access | Research Access | Research Access |
| Number of Analysts (Estimated EPS) | 14 | Research Access | Research Access | Research Access | Research Access |
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Current Key Metrics
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Login — it's freeSWOT Analysis
Strengths (preview)
- Accelerating Revenue and Earnings Growth at Scale: FY2026 revenue reached $331.8B (+17.8% YoY), with net income of $133.7B (+31.3% YoY) and diluted EPS of $17.95 (vs. $13.64 in FY2025). Q1 FY2027 extended this trajectory with 19% revenue growth, 21% operating income growth, and 18% EPS growth, exceeding consensus across all three metrics. Microsoft Cloud revenue surpassed $63B, growing 30% YoY, with Azure up 48%.
- Superior Margin Profile and Capital Efficiency: TTM gross margin of 67.9%, net margin of 40.3%, ROE of 33.2%, and ROIC of 20.6% reflect a high-quality earnings base. Despite heavy infrastructure spending, management maintained robust margins—a differentiator versus peers whose AI capex is compressing profitability.
- Fortress Balance Sheet with Low Leverage: Debt-to-equity of 0.29 and a current ratio of 1.23 provide substantial capacity to fund the AI infrastructure build-out. Operating cash flow of $182.9B in FY2026 (+34% YoY) comfortably covers capex ($115.9B) and dividends ($26.4B), yielding $67.0B in free cash flow.
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Intrinsic Value Calculator
Based on current fundamentals and analyst forecasts, MarketSnap estimates MSFT intrinsic value between $450.95 – $474.06 per share. This depends on revenue growth, margins, and discount rate.
This is an automatic estimate. The most reliable way to know fair value for your own assumptions is to run the calculator below.
Common questions about MSFT valuation
Is Microsoft Corporation (MSFT) overvalued or undervalued right now?
MarketSnap estimates intrinsic value for Microsoft Corporation (MSFT) using its proprietary valuation methodology, which incorporates discounted cash flow (DCF) analysis together with long-term earnings and fundamentals assumptions. By comparing intrinsic value to the current market price, long-term investors can see whether the stock screens as potentially overvalued, fairly valued, or undervalued today.
Is MSFT a buy, hold, or sell for long-term investors?
MarketSnap does not give one-word “buy” or “sell” calls. Instead, it shows whether MSFT trades at a premium or discount to its estimated intrinsic value, how sensitive that value is to growth and margin assumptions, and how the stock fits into a diversified, long-term portfolio so investors can make their own buy, hold, or sell decision.
What is MSFT’s P/E ratio?
You can see MSFT’s trailing P/E (TTM) and forward P/E estimates in the Current Key Metrics and Forward P/E Ratios sections above. The P/E ratio compares the current share price to earnings per share and helps investors gauge valuation relative to earnings.
How is intrinsic value calculated for MSFT?
MarketSnap uses its own valuation framework—not a generic spreadsheet DCF alone. Future cash flows and earnings are projected, discounted, and combined with MarketSnap’s methodology so intrinsic value reflects fundamentals and long-term assumptions. You can run your own inputs and see the result using the Intrinsic Value Calculator above.
Is MSFT a good long-term investment?
Whether MSFT fits a long-term portfolio depends on your assumptions about growth, margins, and risk. MarketSnap provides the metrics, intrinsic value calculator, and SWOT context so you can form your own view rather than rely on a single buy/sell rating.
MSFT
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Daily snapshot
2.74
Trading Metrics:
| Open: | 508.46 | Previous Close: | 507.12 | |
| Day Low: | 507.85 | Day High: | 523.42 | |
| Year Low: | 349.2 | Year High: | 555.45 | |
| Price Avg 50: | 513.39 | Price Avg 200: | 438.18 | |
| Volume: | 19.913M | Average Volume: | 29.505M |
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