Reports › MSFT › 10-K FY2026

SEC filings, compared

What changed in Microsoft's 10-K for the fiscal year ended June 30, 2026

Compared with the 10-K for the fiscal year ended June 30, 2025. Items 1A and 7 analysed; every summary checked against the quoted filing text.

Registrant: MICROSOFT CORP · MSFT
This filing: 0001193125-26-323660 ↗ · filed Jul 29, 2026
Compared with: 0000950170-25-100235 ↗ · filed Jul 30, 2025
Processed: Sep 14, 2026 UTC · parser-v4 · classify-v4 · select-v1

Research tool. Describes what filings say. Not investment advice. Verify independently. Read the cited paragraph before relying on it.

How a report is made

120 material changes among 176 changed paragraphs

18 shown by default across the three sections below; each section's "Show all" reaches the rest, in filing order.

Numbers from XBRL

Each figure is the one the filing itself tagged, taken from the filing that reported it. Not written by a model.

Concept	FY2026	FY2025	Change (our arithmetic)
Revenueus-gaap:RevenueFromContractWithCustomerExcludingAssessedTax	331,839,000,000USD · Jul 1, 2025 to Jun 30, 2026	281,724,000,000USD · Jul 1, 2024 to Jun 30, 2025	+50,115,000,000+17.8%
Net income or lossus-gaap:NetIncomeLoss	133,749,000,000USD · Jul 1, 2025 to Jun 30, 2026	101,832,000,000USD · Jul 1, 2024 to Jun 30, 2025	+31,917,000,000+31.3%
Cash and cash equivalentsus-gaap:CashAndCashEquivalentsAtCarryingValue	20,935,000,000USD · at Jun 30, 2026	30,242,000,000USD · at Jun 30, 2025	−9,307,000,000−30.8%
Net cash from operating activitiesus-gaap:NetCashProvidedByUsedInOperatingActivities	182,935,000,000USD · Jul 1, 2025 to Jun 30, 2026	136,162,000,000USD · Jul 1, 2024 to Jun 30, 2025	+46,773,000,000+34.4%

Values as tagged in the filing's inline XBRL, resolved by accession rather than by period matching. When a value is not tagged, we show that instead of estimating it. FY2026: 0001193125-26-323660 · FY2025: 0000950170-25-100235

What the company says for the first time

Paragraphs with no counterpart in the prior filing.

27 material additions

Item 1A · Risk Factors

5 of 16 shown · Ordered by the model, quote-checked

01AddedItem 1A › STRATEGIC AND COMPETITIVE RISKS › We face intense competition across all markets for our products and services, which could adversely affect our results of operations.

Summary · quote-checked

Added a risk disclosure addressing uncertain cloud and AI demand, capacity misalignment, asset impairment, and inability to meet customer needs.

The paragraph introduces substantive risks involving demand forecasting, infrastructure underutilization, asset impairments, capacity constraints, and customer service limitations.

Why the model ranked it here

Client should read this because demand misjudgments could leave infrastructure underused, impair assets, or prevent the company from meeting customer needs.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] Demand for cloud-based and AI products and services is evolving and difficult to forecast. Overestimation of demand or misalignment of capacity investments may result in underutilization of infrastructure and may lead to impairment of assets on our balance sheet. Conversely, demand exceeding available capacity limits our ability to meet customer needs in a timely manner.

Cite this change

"Demand for cloud-based and AI products and services is evolving and difficult to forecast. Overestimation of demand or misalignment of capacity investments may result in underutilization of infrastructure and may lead to impairment of assets on our balance sheet. Conversely, demand exceeding available capacity limits our ability to meet customer needs in a timely manner."

Microsoft, Form 10-K for FY2026, Item 1A, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

02AddedItem 1A › OPERATIONAL RISKS

Summary · quote-checked

Added a risk concerning electrical power availability, infrastructure constraints, costs, and their potential effects on datacenter expansion and growth.

The new paragraph identifies power dependencies, potential constraints and outages, utility or regulatory requirements, and consequences for datacenter capacity and customer demand.

Why the model ranked it here

Client should read this because limited or costly electrical power could restrict datacenter expansion and the company’s ability to support demand.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] The availability, reliability, and cost of electrical power are critical to the operation and expansion of our datacenters. In many regions, electricity generation, transmission, and distribution infrastructure is experiencing increasing demand and capacity constraints. Limitations in power availability, delays in obtaining power connections, outages, shortages, increased energy costs, or requirements imposed by utilities, regulators, or other market participants could restrict our ability to develop or expand datacenter capacity. In addition, alternative energy sources and other emerging solutions may not be available in sufficient quantities, may not timely scale to meet our requirements, or may be available only at higher costs. If we are unable to secure adequate power resources on commercially reasonable terms, our ability to support customer demand and execute our growth strategy could be adversely affected.

Cite this change

"The availability, reliability, and cost of electrical power are critical to the operation and expansion of our datacenters. In many regions, electricity generation, transmission, and distribution infrastructure is experiencing increasing demand and capacity constraints. Limitations in power availability, delays in obtaining power connections, outages, shortages, increased energy costs, or requirements imposed by utilities, regulators, or other market participants could restrict our ability to develop or expand datacenter capacity. In addition, alternative energy sources and other emerging solutions may not be available in sufficient quantities, may not timely scale to meet our requirements, or may be available only at higher costs. If we are unable to secure adequate power resources on commercially reasonable terms, our ability to support customer demand and execute our growth strategy could be adversely affected."

Microsoft, Form 10-K for FY2026, Item 1A, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

03AddedItem 1A › STRATEGIC AND COMPETITIVE RISKS › We face intense competition across all markets for our products and services, which could adversely affect our results of operations.

Summary · quote-checked

Added a risk describing dependence on strategic AI partners, third-party technologies, cloud consumption, infrastructure capacity, and evolving customer demand.

The paragraph introduces substantive dependencies and potential adverse events involving partners, access to technology, capacity allocations, commercial arrangements, and demand for AI products and services.

Why the model ranked it here

Client should read this because the AI strategy depends on partners that may compete with the company, change arrangements, or reduce expected technology access and cloud consumption.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] Our AI strategy also depends in part on strategic relationships with third parties that provide technologies, models, products, and services that enhance our offerings. These relationships may change over time, and many of these partners compete with us with respect to certain products and services. Changes in strategic priorities, contractual arrangements, our access to third-party technologies, or key commercial relationships could adversely affect the competitiveness of our AI products and services. In some cases, these parties are significant customers of Azure and other cloud services. The economic benefits we expect to derive from these relationships, including through commercial arrangements, technology access, and Azure consumption, may not be realized or sustained. As we manage infrastructure capacity constraints and evolving customer demand, we may modify capacity allocations, deployment priorities, pricing, or other commercial arrangements. Strategic partners and other customers may likewise adjust their purchasing decisions, deployment strategies, workloads, or anticipated use of our products and services. As a result, expected consumption or anticipated demand may not materialize, may be delayed or reduced, or may decline over time. Any such developments could adversely affect our business, financial condition, and results of operations.

Cite this change

"Our AI strategy also depends in part on strategic relationships with third parties that provide technologies, models, products, and services that enhance our offerings. These relationships may change over time, and many of these partners compete with us with respect to certain products and services. Changes in strategic priorities, contractual arrangements, our access to third-party technologies, or key commercial relationships could adversely affect the competitiveness of our AI products and services. In some cases, these parties are significant customers of Azure and other cloud services. The economic benefits we expect to derive from these relationships, including through commercial arrangements, technology access, and Azure consumption, may not be realized or sustained. As we manage infrastructure capacity constraints and evolving customer demand, we may modify capacity allocations, deployment priorities, pricing, or other commercial arrangements. Strategic partners and other customers may likewise adjust their purchasing decisions, deployment strategies, workloads, or anticipated use of our products and services. As a result, expected consumption or anticipated demand may not materialize, may be delayed or reduced, or may decline over time. Any such developments could adversely affect our business, financial condition, and results of operations."

Microsoft, Form 10-K for FY2026, Item 1A, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

04AddedItem 1A › OPERATIONAL RISKS

Summary · quote-checked

Adds a risk concerning reliance on third-party datacenter and cloud infrastructure providers and potential disruptions to service delivery and system performance.

The new paragraph discloses a previously absent operational dependency and identifies provider failures, capacity constraints, cybersecurity incidents, and other disruptions as risks.

Why the model ranked it here

Client should read this because failures or disruptions at third-party infrastructure providers could impair service delivery, system performance, and customer expectations.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] In addition to datacenters we own or operate, we rely on third-party providers, including colocation facilities, leased datacenters, and cloud infrastructure providers, to support portions of our operations. If any of these providers fail to meet our requirements, or experience service interruptions, operational failures, capacity constraints, physical damage, cybersecurity incidents, or other disruptions, our ability to provide services, maintain system performance, or meet customer expectations could be negatively impacted.

Cite this change

"In addition to datacenters we own or operate, we rely on third-party providers, including colocation facilities, leased datacenters, and cloud infrastructure providers, to support portions of our operations. If any of these providers fail to meet our requirements, or experience service interruptions, operational failures, capacity constraints, physical damage, cybersecurity incidents, or other disruptions, our ability to provide services, maintain system performance, or meet customer expectations could be negatively impacted."

Microsoft, Form 10-K for FY2026, Item 1A, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

05AddedItem 1A › OPERATIONAL RISKS

Summary · quote-checked

Adds a risk concerning delays or inability to obtain necessary equipment, hardware, or components on acceptable terms and timelines.

The new paragraph discloses a supply and infrastructure dependency, including potential effects on deployments, sales, and costs.

Why the model ranked it here

Client should read this because delays or unfavorable terms for essential equipment and components could delay deployments, reduce sales, and increase costs.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

We may experience supply problems. There are limited suppliers for certain critical device and datacenter components, and those items are in short supply. We continue to identify and evaluate opportunities to expand our datacenter locations and increase our server capacity to meet the evolving needs of our customers, particularly given the growing demand for AI products and services. Our competitors are also scaling their infrastructure and use some of the same suppliers and materials for hardware components as we do, which impacts price and availability. We depend on the timely availability of critical hardware, equipment, and components used to construct and operate datacenters and related infrastructure. We have experienced and may continue to experience supply constraints, including shortages of semiconductors, networking equipment, power systems, cooling equipment, and other key components. Expanding manufacturing or supply capacity for certain components may require significant investments and multi-year lead times. As components are delayed or become unavailable or more expensive, whether because of supplier capacity constraint, industry shortages, legal or regulatory changes that restrict supply sources, geopolitical tensions, trade restrictions, tariffs, transportation disruptions, supplier financial distress, natural disasters, public health events, instability in regions important to our or our suppliers' supply chains, or other reasons, we may not obtain timely replacement supplies, or may be able to obtain supplies only by entering into long-term purchase commitments, price commitments, paying prices above prevailing market rates, or other arrangements on terms that are less favorable than prevailing market terms. [added] Any delay or inability to obtain necessary equipment, hardware, or components on acceptable terms and timelines could delay infrastructure deployments, result in reduced sales, higher costs, or

Cite this change

"Any delay or inability to obtain necessary equipment, hardware, or components on acceptable terms and timelines could delay infrastructure deployments, result in reduced sales, higher costs, or"

Microsoft, Form 10-K for FY2026, Item 1A, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

Show all 16 in Item 1A (11 more, in filing order)

Item 7 · MD&A

3 of 11 shown · Ordered by the model, quote-checked

01AddedItem 7 › OVERVIEW

Summary · quote-checked

Added disclosure that commercial remaining performance obligation increased 84% to $678 billion.

The new paragraph introduces a quantified performance-obligation disclosure and states a substantial increase, adding information about the company’s commitments.

Why the model ranked it here

The sharp expansion in commercial remaining performance obligations materially changes the scale of commitments and future revenue visibility disclosed to clients.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] Commercial remaining performance obligation increased 84% to $678 billion.

Cite this change

"Commercial remaining performance obligation increased 84% to $678 billion."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

02AddedItem 7 › OTHER INCOME (EXPENSE), NET

Summary · quote-checked

Added disclosure of net gains and losses from OpenAI investments, including a fiscal year 2026 dilution gain from the OpenAI Recapitalization.

The paragraph introduces a new investment-related result and identifies a specific recapitalization event underlying the gain, changing the disclosed substance of MD&A.

Why the model ranked it here

The newly disclosed investment gains and losses, including a recapitalization-related dilution gain, materially change the explanation of other income.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] Other income (expense), net included $6.5 billion of net gains and $4.8 billion of net losses for fiscal years 2026 and 2025, respectively, from investments in OpenAI, primarily net recognized gains (losses) on our equity method investment reflected in Other, net. The net gains recorded for fiscal year 2026 primarily relate to the dilution gain from the OpenAI Recapitalization.

Cite this change

"Other income (expense), net included $6.5 billion of net gains and $4.8 billion of net losses for fiscal years 2026 and 2025, respectively, from investments in OpenAI, primarily net recognized gains (losses) on our equity method investment reflected in Other, net. The net gains recorded for fiscal year 2026 primarily relate to the dilution gain from the OpenAI Recapitalization."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

03AddedItem 7 › SUMMARY RESULTS OF OPERATIONS

Summary · quote-checked

Added disclosure that OpenAI investment gains increased current-year net income and diluted EPS, while prior-year losses decreased both metrics.

The new paragraph introduces an investment-related source of earnings volatility and quantifies its effects on net income and diluted EPS, changing the disclosed results narrative.

Why the model ranked it here

The investment gains materially affected reported net income and diluted earnings per share, making underlying performance more difficult to assess without this context.

Filing text · FY2025 10-K · filed Jul 30, 2025

No corresponding language in the FY2025 10-K.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] Current year net income and diluted EPS were positively impacted by net gains from investments in OpenAI, which resulted in an increase in net income and diluted EPS of $5.0 billion and $0.67, respectively. Prior year net income and diluted EPS were negatively impacted by net losses from investments in OpenAI, which resulted in a decrease in net income and diluted EPS of $3.6 billion and $0.49, respectively.

Cite this change

"Current year net income and diluted EPS were positively impacted by net gains from investments in OpenAI, which resulted in an increase in net income and diluted EPS of $5.0 billion and $0.67, respectively."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

Show all 11 in Item 7 (8 more, in filing order)

What the company no longer says

Paragraphs of the prior filing that this filing dropped. Only last year's text can show these.

5 material removals

Item 1A · Risk Factors

1 of 1 shown · In filing order, too few to rank

01RemovedItem 1A › INTELLECTUAL PROPERTY RISKS

Summary · quote-checked

A risk disclosure about weakened patent protection, broad open-source licensing, and resulting operational effects was removed.

The removed paragraph described intellectual-property risks and a potential adverse effect on results of operations, so its deletion changes disclosed risk substance.

Filing text · FY2025 10-K · filed Jul 30, 2025

[removed] Changes in the law may continue to weaken our ability to prevent the use of patented technology. Our increasing engagement with open source software will also cause us to license our intellectual property rights broadly in certain situations. If we are unable to protect our intellectual property, our results of operations could be adversely affected.

Filing text · FY2026 10-K · filed Jul 29, 2026

No corresponding language in the FY2026 10-K.

Cite this change

"Changes in the law may continue to weaken our ability to prevent the use of patented technology."

Microsoft, Form 10-K for FY2025, Item 1A, accession 0000950170-25-100235, filed 30 July 2025.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000095017025100235/msft-20250630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

Item 7 · MD&A

4 of 4 shown · In filing order, too few to rank

01RemovedItem 7 › Reportable Segments

Summary · quote-checked

Removed disclosure describing segment composition changes, related management reporting, and recasting of prior-period segment information.

The deleted paragraph disclosed a substantive change in reportable segments and how management allocates resources and assesses performance, not merely a presentation or date update.

Filing text · FY2025 10-K · filed Jul 30, 2025

[removed] In August 2024, we announced changes to the composition of our segments. These changes align our segments with how we currently manage our business, most notably bringing the commercial components of Microsoft 365 together in the Productivity and Business Processes segment. Beginning in fiscal year 2025, the information that our chief operating decision maker is regularly provided and reviews for purposes of allocating resources and assessing performance reflects these segment changes. Prior period segment information has been recast to conform to the way we internally manage and monitor our business during fiscal year 2025.

Filing text · FY2026 10-K · filed Jul 29, 2026

No corresponding language in the FY2026 10-K.

Cite this change

"In August 2024, we announced changes to the composition of our segments. These changes align our segments with how we currently manage our business, most notably bringing the commercial components of Microsoft 365 together in the Productivity and Business Processes segment. Beginning in fiscal year 2025, the information that our chief operating decision maker is regularly provided and reviews for purposes of allocating resources and assessing performance reflects these segment changes. Prior period segment information has been recast to conform to the way we internally manage and monitor our business during fiscal year 2025."

Microsoft, Form 10-K for FY2025, Item 7, accession 0000950170-25-100235, filed 30 July 2025.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000095017025100235/msft-20250630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

02RemovedItem 7 › Effective Tax Rate

Summary · quote-checked

The MD&A removed disclosure about Pillar Two’s 15% global minimum tax and its potential impact beginning in fiscal year 2025.

The removed paragraph disclosed a newly applicable tax regime, implementation across countries, monitoring, and expected financial-statement impact, representing substantive information about an obligation.

Filing text · FY2025 10-K · filed Jul 30, 2025

[removed] The Organisation for Economic Co-operation and Development ("OECD") published its model rules "Tax Challenges Arising From the Digitalisation of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)" which established a global minimum corporate tax rate of 15% for certain multinational enterprises. Many countries have implemented or are in the process of implementing the Pillar Two legislation, which applies to Microsoft beginning in fiscal year 2025. While we do not currently estimate a material impact to our consolidated financial statements, we continue to monitor the impact as countries implement legislation and the OECD provides additional guidance.

Filing text · FY2026 10-K · filed Jul 29, 2026

No corresponding language in the FY2026 10-K.

Cite this change

"The Organisation for Economic Co-operation and Development ("OECD") published its model rules "Tax Challenges Arising From the Digitalisation of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)" which established a global minimum corporate tax rate of 15% for certain multinational enterprises. Many countries have implemented or are in the process of implementing the Pillar Two legislation, which applies to Microsoft beginning in fiscal year 2025. While we do not currently estimate a material impact to our consolidated financial statements, we continue to monitor the impact as countries implement legislation and the OECD provides additional guidance."

Microsoft, Form 10-K for FY2025, Item 7, accession 0000950170-25-100235, filed 30 July 2025.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000095017025100235/msft-20250630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

03RemovedItem 7 › Effective Tax Rate

Summary · quote-checked

The current filing removes disclosure that Microsoft was assessing the OBBBA and describes its tax-rate, depreciation, and research-expensing provisions.

The removed paragraph disclosed a newly enacted law and specific tax provisions affecting Microsoft, constituting a substantive tax obligation and policy disclosure rather than a wording or date update.

Filing text · FY2025 10-K · filed Jul 30, 2025

[removed] We are currently assessing the One Big Beautiful Bill Act ("OBBBA") which was enacted on July 4, 2025. The OBBBA provides a U.S. global intangible low-taxed income effective tax rate of 14% effective fiscal year 2027 for Microsoft. It also provides bonus depreciation for certain assets placed into service after January 19, 2025 and an election to expense U.S. incurred research or experimental expenditures.

Filing text · FY2026 10-K · filed Jul 29, 2026

No corresponding language in the FY2026 10-K.

Cite this change

"We are currently assessing the One Big Beautiful Bill Act ("OBBBA") which was enacted on July 4, 2025. The OBBBA provides a U.S. global intangible low-taxed income effective tax rate of 14% effective fiscal year 2027 for Microsoft. It also provides bonus depreciation for certain assets placed into service after January 19, 2025 and an election to expense U.S. incurred research or experimental expenditures."

Microsoft, Form 10-K for FY2025, Item 7, accession 0000950170-25-100235, filed 30 July 2025.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000095017025100235/msft-20250630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

04RemovedItem 7 › Income Taxes

Summary · quote-checked

Removed disclosure of the TCJA transition tax installments, including the $4.4 billion eighth installment payable in fiscal year 2026.

The removed paragraph disclosed a specific remaining tax obligation, payment timing, and installment amount, changing the filing’s statement about commitments and liquidity.

Filing text · FY2025 10-K · filed Jul 30, 2025

[removed] As a result of the TCJA, we are required to pay a one-time transition tax on deferred foreign income not previously subject to U.S. income tax. Under the TCJA, the transition tax is payable in interest-free installments over eight years, with 8% due in each of the first five years, 15% in year six, 20% in year seven, and 25% in year eight. As of June 30, 2025, our eighth transition tax installment of $4.4 billion is short-term and payable in the first quarter of fiscal year 2026.

Filing text · FY2026 10-K · filed Jul 29, 2026

No corresponding language in the FY2026 10-K.

Cite this change

"As of June 30, 2025, our eighth transition tax installment of $4.4 billion is short-term and payable in the first quarter of fiscal year 2026."

Microsoft, Form 10-K for FY2025, Item 7, accession 0000950170-25-100235, filed 30 July 2025.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000095017025100235/msft-20250630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

What the company says differently

Paragraphs that changed between the two filings, shown as a word diff.

88 material changes

Item 1A · Risk Factors

2 of 42 shown · Ordered by the model, quote-checked

01ChangedItem 1A › CYBERSECURITY, DATA PRIVACY, AND PLATFORM ABUSE RISKS › Cyberattacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position.

Summary · quote-checked

Added details of a nation-state attack and unauthorized access, expanded affected parties to suppliers, and clarified patching failures.

The paragraph now discloses a specific cyber incident, unauthorized access to repositories and systems, and potential continuing effects, substantively changing the disclosed cybersecurity risk.

Why the model ranked it here

The disclosure moves cybersecurity exposure from a general threat to a specific nation-state intrusion involving unauthorized access to company repositories and systems.

Filing text · FY2025 10-K · filed Jul 30, 2025

Threats to security can take a variety of forms. Threat actors, including individual and groups of hackers and sophisticated organizations, including nation-states, state-sponsored organizations, or cybercriminal groups, continuously undertake attacks that pose threats to our customers and our internal infrastructure, and we have experienced cybersecurity incidents in which such actors have gained unauthorized access to our systems and data, including customer systems and data. These actors use a wide variety of methods, which include developing and deploying malicious software; exploiting known and potential vulnerabilities or intentionally designed processes in our or third-party hardware, software, or other infrastructure to attack our products and services or gain access to our networks and datacenters; using social engineering techniques to induce our employees, users, partners, or customers to disclose sensitive information, such as passwords, or take other actions to gain access to our data or our users' or customers' data; or acting in a coordinated manner or conducting coordinated attacks. For example, as previously disclosed in our Form 8-K filed with the Securities and Exchange Commission on January 19, 2024 and amended on March 8, 2024, beginning in late November 2023, a nation-state associated threat actor used a password spray attack to compromise a legacy test account and, in turn, gain access to Microsoft email accounts. The threat actor used information it obtained to gain unauthorized access to some of our source code repositories and internal systems, and the threat actor could continue to utilize this and other information to attempt to gain access to our systems or otherwise adversely affect our business and results of operations. This incident has and may continue to result in harm to our reputation and customer relationships. Nation-state and state-sponsored actors can sustain malicious activities for extended periods and deploy significant resources to plan and carry out attacks. Nation-state attacks against us, our customers, ~~[removed] or our~~ partners have and may continue to intensify due to our transparency to our customers, other stakeholders, and the public about cyberattacks, and during elections or periods of intense diplomatic or armed conflict. Challenges or failures ~~[removed] in applying~~ security patches to all hardware and devices connected to our systems, including end-of-life and end-of-support equipment, have and may continue to result in unauthorized access to our systems and data in the future. Cyber incidents and attacks, individually or in the aggregate, could adversely affect our financial condition, results of operations, competitive position, and reputation, or expose us to legal or regulatory risk.

Filing text · FY2026 10-K · filed Jul 29, 2026

Threats to security can take a variety of forms. Threat actors, including individual and groups of hackers and sophisticated organizations, including nation-states, state-sponsored organizations, or cybercriminal groups, continuously undertake attacks that pose threats to our customers and our internal infrastructure, and we have experienced cybersecurity incidents in which such actors have gained unauthorized access to our systems and data, as well as customer, partner, and supplier systems and data. These actors use a wide variety of methods, which include developing and deploying malicious software; exploiting known, latent, or potential vulnerabilities or intentionally designed processes in our or third-party hardware, software, or other infrastructure to attack our products and services or gain access to our networks and datacenters; using social engineering and AI-assisted techniques to induce our employees, users, partners, suppliers, or customers to disclose sensitive information, such as passwords, or take other actions to gain access to our data or our users' or customers' data; or acting in a coordinated manner or conducting coordinated attacks. For example, as previously disclosed in our Form 8-K filed with the Securities and Exchange [added] Commission on January 19, 2024 and amended on March 8, 2024, beginning in late November 2023, a nation-state associated threat actor used a password spray attack to compromise a legacy test account and, in turn, gain access to Microsoft email accounts. The threat actor used information it obtained to gain unauthorized access to some of our source code repositories and internal systems, and the threat actor could continue to utilize this and other information to attempt to gain access to our systems or otherwise adversely affect our business and results of operations. This incident has and may continue to result in harm to our reputation and customer relationships. Nation-state and state-sponsored actors can sustain malicious activities for extended periods and deploy significant resources to plan and carry out attacks. Nation-state attacks against us, our customers, [added] suppliers, or partners have and may continue to intensify due to our transparency to our customers, other stakeholders, and the public about cyberattacks, and during elections or periods of intense diplomatic or armed conflict. Challenges or failures [added] to update or apply security patches to all hardware and devices connected to our systems, including end-of-life and end-of-support equipment, have and may continue to result in unauthorized access to our systems and data in the future. Cyber incidents and attacks, individually or in the aggregate, could adversely affect our financial condition, results of operations, competitive position, and reputation, or expose us to legal or regulatory risk.

Cite this change

"Commission on January 19, 2024 and amended on March 8, 2024, beginning in late November 2023, a nation-state associated threat actor used a password spray attack to compromise a legacy test account and, in turn, gain access to Microsoft email accounts. The threat actor used information it obtained to gain unauthorized access to some of our source code repositories and internal systems, and the threat actor could continue to utilize this and other information to attempt to gain access to our systems or otherwise adversely affect our business and results of operations."

Microsoft, Form 10-K for FY2026, Item 1A, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

02ChangedItem 1A › OPERATIONAL RISKS

Summary · quote-checked

Expanded supply-chain risk disclosure to state experienced and ongoing shortages, infrastructure dependencies, capacity investments, and potentially unfavorable procurement arrangements.

The current paragraph adds substantive supply constraints, named affected components, investment lead times, and obligations to accept costly or unfavorable supply arrangements.

Why the model ranked it here

The disclosure states that supply constraints have already occurred and identifies critical components, infrastructure dependencies, and potentially costly procurement obligations.

Filing text · FY2025 10-K · filed Jul 30, 2025

We may experience supply ~~[removed] or quality~~ problems. There are limited suppliers for certain device and datacenter ~~[removed] components.~~ We continue to identify and evaluate opportunities to expand our datacenter locations and increase our server capacity to meet the evolving needs of our customers, particularly given the growing demand for AI ~~[removed] services. Capacity available to us may be affected as competitors~~ use some of the same suppliers and materials for hardware [removed] components. If components are delayed or become unavailable, whether because of supplier capacity constraint, industry shortages, legal or regulatory changes that restrict supply sources, or other reasons, we may not obtain timely replacement supplies, resulting in reduced sales or inadequate datacenter capacity to support the delivery and continued development of our products and services. Component shortages, excess or obsolete inventory, or price reductions resulting in inventory adjustments may increase our cost of revenue. Datacenter servers, Xbox consoles, Surface devices, and other hardware are assembled in Asia and other geographies that may be subject to disruptions in the supply chain, resulting in shortages which could adversely affect our business, operations, financial condition, and results of operations.

Filing text · FY2026 10-K · filed Jul 29, 2026

We may experience supply problems. There are limited suppliers for certain [added] critical device and datacenter [added] components, and those items are in short supply. We continue to identify and evaluate opportunities to expand our datacenter locations and increase our server capacity to meet the evolving needs of our customers, particularly given the growing demand for AI [added] products and services. Our competitors are also scaling their infrastructure and use some of the same suppliers and materials for hardware [added] components as we do, which impacts price and availability. We depend on the timely availability of critical hardware, equipment, and components used to construct and operate datacenters and related infrastructure. We have experienced and may continue to experience supply constraints, including shortages of semiconductors, networking equipment, power systems, cooling equipment, and other key components. Expanding manufacturing or supply capacity for certain components may require significant investments and multi-year lead times. As components are delayed or become unavailable or more expensive, whether because of supplier capacity constraint, industry shortages, legal or regulatory changes that restrict supply sources, geopolitical tensions, trade restrictions, tariffs, transportation disruptions, supplier financial distress, natural disasters, public health events, instability in regions important to our or our suppliers' supply chains, or other reasons, we may not obtain timely replacement supplies, or may be able to obtain supplies only by entering into long-term purchase commitments, price commitments, paying prices above prevailing market rates, or other arrangements on terms that are less favorable than prevailing market terms. Any delay or inability to obtain necessary equipment, hardware, or components on acceptable terms and timelines could delay infrastructure deployments, result in reduced sales, higher costs, or

Cite this change

"We have experienced and may continue to experience supply constraints, including shortages of semiconductors, networking equipment, power systems, cooling equipment, and other key components."

Microsoft, Form 10-K for FY2026, Item 1A, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

Show all 42 in Item 1A (40 more, in filing order)

Item 7 · MD&A

3 of 46 shown · Ordered by the model, quote-checked

01ChangedItem 7 › Industry Trends and Opportunities

Summary · quote-checked

The paragraph adds partnership extensions and ongoing revenue-sharing payments while removing Azure API exclusivity and the right of first refusal on capacity.

The disclosure changes the partnership’s duration, revenue arrangement, and stated Azure and capacity rights, altering dependencies and obligations rather than merely rephrasing them.

Why the model ranked it here

The partnership disclosure removes previously stated Azure exclusivity and capacity rights while adding extensions and continuing revenue-sharing payments, changing a major dependency and obligation.

Filing text · FY2025 10-K · filed Jul 30, 2025

~~[removed] Microsoft and OpenAI maintain~~ a long-term strategic partnership originally established in 2019. [removed] Microsoft is a major investor in OpenAI, and the companies have reciprocal revenue-sharing arrangements. We hold rights to OpenAI's intellectual property, including models and infrastructure, for integration into our products. The OpenAI API is exclusive to Azure, runs on Azure, and is available through the Azure OpenAI Service. We also have a right of first refusal on OpenAI's new capacity needs.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] We have a long-term strategic partnership [added] with OpenAI which was originally established in 2019. [added] In October 2025 and April 2026, we extended this partnership and continue to build on our shared vision to advance artificial intelligence responsibly and make its benefits broadly accessible. Microsoft is a major investor in OpenAI and will continue to receive revenue-sharing payments. We hold rights to OpenAI's intellectual property, including models and infrastructure, for integration into our products.

Cite this change

"In October 2025 and April 2026, we extended this partnership and continue to build on our shared vision to advance artificial intelligence responsibly and make its benefits broadly accessible. Microsoft is a major investor in OpenAI and will continue to receive revenue-sharing payments."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

02ChangedItem 7 › Cash Flows

Summary · quote-checked

Cash-flow discussion changes in operating, financing, and investing directions, amounts, and stated drivers.

The paragraph substantively changes reported cash-flow directions and explanations, including debt repayments, repurchases, dividends, property additions, and investing to facilitate component purchases.

Why the model ranked it here

The cash-flow discussion reverses investment and financing trends and highlights substantially greater spending on property, equipment, and components.

Filing text · FY2025 10-K · filed Jul 30, 2025

Cash from operations increased ~~[removed] $17.6~~ billion to ~~[removed] $136.2~~ billion for fiscal year ~~[removed] 2025,~~ primarily due to an increase in cash received from ~~[removed] customers,~~ offset in part by an increase in cash paid to ~~[removed] suppliers and employees and cash used to pay income taxes.~~ Cash used in financing increased ~~[removed] $13.9 billion to $51.7~~ billion for fiscal year ~~[removed] 2025,~~ primarily due to a ~~[removed] $9.5 billion increase~~ in cash used for repayments of debt, ~~[removed] net of proceeds.~~ Cash used in investing ~~[removed] decreased $24.4~~ billion to ~~[removed] $72.6~~ billion for fiscal year ~~[removed] 2025,~~ primarily due to a ~~[removed] $63.2 billion decrease in cash used for acquisitions of companies, net of cash acquired and divestitures, and purchases of intangible and other assets,~~ offset in part by a ~~[removed] $22.3 billion increase~~ in cash used in ~~[removed] net investment purchases, sales, and maturities, and a $20.1 billion increase in additions to property and equipment.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Cash from operations increased [added] $46.8 billion to [added] $182.9 billion for fiscal year [added] 2026, primarily due to an increase in cash received from [added] customers and a decrease in cash used to pay income taxes, offset in part by an increase in cash paid to [added] suppliers. Cash used in financing increased [added] $847 million to $52.5 billion for fiscal year [added] 2026, primarily due to a [added] $6.0 billion decrease in cash used for repayments of debt, [added] offset in part by a $3.9 billion increase in common stock repurchases and a $2.4 billion increase in dividends paid. Cash used in investing [added] increased $66.9 billion to [added] $139.5 billion for fiscal year [added] 2026, primarily due to a [added] $51.4 billion increase in additions to property and equipment and a $22.2 billion increase in cash used in other investing primarily to facilitate the purchase of components, offset in part by a [added] $4.2 billion decrease in cash used in [added] the acquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets and a $2.4 billion decrease in cash used in net investment purchases, sales, and maturities.

Cite this change

"Cash used in investing increased $66.9 billion to $139.5 billion for fiscal year 2026, primarily due to a $51.4 billion increase in additions to property and equipment and a $22.2 billion increase in cash used in other investing primarily to facilitate the purchase of components, offset in part by a $4.2 billion decrease in cash used in the acquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets and a $2.4 billion decrease in cash used in net investment purchases, sales, and maturities."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

03Figures updatedItem 7 › Cash, Cash Equivalents, and Investments

Summary · quote-checked

Cash, cash equivalents, and short-term investments decreased, while equity and other investments increased in the rolled-forward period.

The updated figures indicate a changed liquidity and investment exposure profile, rather than merely a reporting-period rollover.

Why the model ranked it here

The liquidity profile shows materially less cash and short-term investments alongside a substantial increase in equity and other investments.

Filing text · FY2025 10-K · filed Jul 30, 2025

Cash, cash equivalents, and short-term investments totaled ~~[removed] $94.6~~ billion and ~~[removed] $75.5~~ billion as of June 30, ~~[removed] 2025 and 2024,~~ respectively. Equity and other investments were ~~[removed] $15.4~~ billion and ~~[removed] $14.6~~ billion as of June 30, ~~[removed] 2025 and 2024,~~ respectively. Our short-term investments are primarily intended to facilitate liquidity and capital preservation. They consist predominantly of highly liquid investment-grade fixed-income securities, diversified among industries and individual issuers. The investments are predominantly U.S. dollar-denominated securities, but also include foreign currency-denominated securities to diversify risk. Our fixed-income investments are exposed to interest rate risk and credit risk. The credit risk and average maturity of our fixed-income portfolio are managed to achieve economic returns that correlate to certain fixed-income indices. The settlement risk related to these investments is insignificant given that the short-term investments held are primarily highly liquid investment-grade fixed-income securities.

Filing text · FY2026 10-K · filed Jul 29, 2026

Cash, cash equivalents, and short-term investments totaled [added] $76.8 billion and [added] $94.6 billion as of June 30, [added] 2026 and 2025, respectively. Equity and other investments were [added] $36.3 billion and [added] $15.4 billion as of June 30, [added] 2026 and 2025, respectively. Our short-term investments are primarily intended to facilitate liquidity and capital preservation. They consist predominantly of highly liquid investment-grade fixed-income securities, diversified among industries and individual issuers. The investments are predominantly U.S. dollar-denominated securities, but also include foreign currency-denominated securities to diversify risk. Our fixed-income investments are exposed to interest rate risk and credit risk. The credit risk and average maturity of our fixed-income portfolio are managed to achieve economic returns that correlate to certain fixed-income indices. The settlement risk related to these investments is insignificant given that the short-term investments held are primarily highly liquid investment-grade fixed-income securities.

Cite this change

"Cash, cash equivalents, and short-term investments totaled $76.8 billion and $94.6 billion as of June 30, 2026 and 2025, respectively. Equity and other investments were $36.3 billion and $15.4 billion as of June 30, 2026 and 2025, respectively."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

04Figures updatedItem 7 › Contractual Obligations

Summary · quote-checked

The contractual-obligations table rolled to 2027 and disclosed substantially different debt, lease, construction, purchase, interest and total commitments.

Although the table recurs and the year advances, the obligation figures changed substantially, altering the disclosed scale of contractual commitments beyond a calendar roll-forward.

Why the model ranked it here

The contractual-obligations disclosure indicates a substantially different scale and composition of debt, leases, construction, purchasing, and interest commitments.

Filing text · FY2025 10-K · filed Jul 30, 2025

|(In millions) | ~~[removed] 2026~~ | Thereafter | Total||Long-term debt: (a)Principal payments | $ | ~~[removed] 3,000~~ | $ | ~~[removed] 46,206~~ | $ | ~~[removed] 49,206~~Interest payments | ~~[removed] 1,509 | 25,527 | 27,036~~Construction commitments (b) | ~~[removed] 26,859 | 5,290 | 32,149~~Operating and finance leases, including imputed interest (c) | ~~[removed] 12,798 | 165,903 | 178,701~~Purchase commitments (d) | ~~[removed] 103,940 | 6,013 | 109,953~~||Total | $ | ~~[removed] 148,106~~ | $ | ~~[removed] 248,939~~ | $ | ~~[removed] 397,045~~|

Filing text · FY2026 10-K · filed Jul 29, 2026

|(In millions) | 2027 | Thereafter | Total||Long-term debt: (a)Principal payments | $ | 9,250 | $ | 36,886 | $ | 46,136Interest payments | 1,405 | 24,148 | 25,553Construction commitments (b) | 29,848 | 4,718 | 34,566Operating and finance leases, including imputed interest (c) | 32,411 | 411,095 | 443,506Purchase commitments (d) | 169,008 | 25,052 | 194,060||Total | $ | 241,922 | $ | 501,899 | $ | 743,821|

Cite this change

"Operating and finance leases, including imputed interest (c) | 32,411 | 411,095 | 443,506"

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

05ChangedItem 7 › Reportable Segments

Summary · quote-checked

Revenue changed from increasing $3.8 billion or 7% to decreasing $597 million or 1%.

The direction of revenue change flips from an increase to a decrease, making the MD&A statement substantively different rather than a routine period or figure update.

Why the model ranked it here

The company’s overall revenue narrative reverses from growth to decline, materially changing the reported operating direction.

Filing text · FY2025 10-K · filed Jul 30, 2025

Revenue ~~[removed] increased $3.8 billion or 7%.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Revenue [added] decreased $597 million or 1%.

Cite this change

"Revenue decreased $597 million or 1%."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

06ChangedItem 7 › LIQUIDITY AND CAPITAL RESOURCES

Summary · quote-checked

The liquidity discussion no longer identifies the transition tax related to the TCJA among anticipated cash commitments.

A specifically named tax obligation was removed from the commitments list, changing the substance of the liquidity disclosure rather than merely updating wording.

Why the model ranked it here

The liquidity commitments discussion no longer names the transition tax, changing the disclosure of anticipated cash obligations.

Filing text · FY2025 10-K · filed Jul 30, 2025

We expect existing cash, cash equivalents, short-term investments, cash flows from operations, and access to capital markets to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as dividends, share repurchases, debt maturities, material capital expenditures, ~~[removed] and the transition tax related to the Tax Cuts and Jobs Act ("TCJA"),~~ for at least the next 12 months and thereafter for the foreseeable future.

Filing text · FY2026 10-K · filed Jul 29, 2026

We expect existing cash, cash equivalents, short-term investments, cash flows from operations, and access to capital markets to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as dividends, share repurchases, debt maturities, [added] and material capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.

Cite this change

"such as dividends, share repurchases, debt maturities, and material capital expenditures, for at least the next 12 months"

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

07ChangedItem 7 › Economic Conditions, Challenges, and Risks

Summary · quote-checked

The supplier risk expanded to include unforeseen disruptions and component shortages affecting datacenter operations as well as device manufacturing.

The disclosure broadens both the triggering conditions and affected operations, changing the stated dependency and scope of potential impact beyond a terminology update.

Why the model ranked it here

The supplier risk now covers unforeseen disruptions and component shortages that could affect datacenter operations as well as device manufacturing.

Filing text · FY2025 10-K · filed Jul 30, 2025

The investments we are making in cloud and AI infrastructure and devices will continue to increase our operating costs and may decrease our operating margins. We continue to identify and evaluate opportunities to expand our datacenter locations and increase our server capacity to meet the evolving needs of our customers, particularly given the growing demand for AI services. Our datacenters depend on the availability of permitted and buildable land, predictable energy, networking supplies, and servers, including graphics processing units ~~[removed] ("GPUs")~~ and other components. Our devices are primarily manufactured by third-party contract manufacturers. For the majority of our products, we have the ability to use other manufacturers if a current vendor becomes unavailable or unable to meet our requirements. However, some of our products contain certain components for which there are very few qualified suppliers. Extended ~~[removed] disruptions at~~ these suppliers could impact our ability to manufacture devices on time to meet consumer demand.

Filing text · FY2026 10-K · filed Jul 29, 2026

The investments we are making in cloud and AI infrastructure and devices will continue to increase our operating costs and may decrease our operating margins. We continue to identify and evaluate opportunities to expand our datacenter locations and increase our server capacity to meet the evolving needs of our customers, particularly given the growing demand for AI services. Our datacenters depend on the availability of permitted and buildable land, predictable energy, networking supplies, and servers, including graphics processing units and other components. Our devices are primarily manufactured by third-party contract manufacturers. For the majority of our products, we have the ability to use other manufacturers if a current vendor becomes unavailable or unable to meet our requirements. However, some of our products contain certain components for which there are very few qualified suppliers. Extended [added] or unforeseen disruptions, or limited availability of components from these suppliers could impact our ability to [added] operate our datacenters and manufacture devices on time to meet consumer demand.

Cite this change

"Extended or unforeseen disruptions, or limited availability of components from these suppliers could impact our ability to operate our datacenters and manufacture devices on time to meet consumer demand."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

08ChangedItem 7 › Reportable Segments

Summary · quote-checked

Xbox revenue changed from a $2.0 billion increase driven by content and services to a $1.7 billion decrease driven by declines in content, services and hardware.

The direction of revenue changed, and the stated drivers and percentages changed, making the MD&A substantively different rather than a period roll-forward.

Why the model ranked it here

Xbox revenue reverses from growth to decline, with weakness extending across content, services, and hardware.

Filing text · FY2025 10-K · filed Jul 30, 2025

~~[removed] Gaming revenue increased $2.0~~ billion or ~~[removed] 9%~~ driven by ~~[removed] growth in Xbox~~ content and ~~[removed] services, offset in part by a decline in Xbox hardware. Xbox content and services revenue increased 16% driven by the impact of the Activision Blizzard acquisition and Xbox~~ Game Pass. ~~[removed] Xbox~~ hardware revenue decreased ~~[removed] 25%~~ driven by lower volume of consoles sold.

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] XBOX revenue decreased $1.7 billion or [added] 7% driven by [added] declines in XBOX content and [added] services and XBOX hardware. XBOX content and services revenue decreased 5% on a prior year comparable that benefited from strong first-party content performance, offset in part by growth in XBOX Game Pass. [added] XBOX hardware revenue decreased [added] 29% driven by lower volume of consoles sold.

Cite this change

"XBOX revenue decreased $1.7 billion or 7% driven by declines in XBOX content and services and XBOX hardware. XBOX content and services revenue decreased 5% on a prior year comparable that benefited from strong first-party content performance, offset in part by growth in XBOX Game Pass. XBOX hardware revenue decreased 29% driven by lower volume of consoles sold."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

09ChangedItem 7 › SUMMARY RESULTS OF OPERATIONS

Summary · quote-checked

Revenue growth increased, while More Personal Computing revenue shifted from growth driven by Gaming and Search and news to a decrease driven by XBOX and Search.

The paragraph changes the revenue-growth driver and reverses More Personal Computing’s direction from increased to decreased, indicating substantively different operating results.

Why the model ranked it here

More Personal Computing revenue reverses from growth to decline as the contribution of Gaming changes to weakness in Xbox.

Filing text · FY2025 10-K · filed Jul 30, 2025

Revenue increased ~~[removed] $36.6~~ billion or ~~[removed] 15% with growth across each of our segments.~~ Intelligent Cloud revenue increased driven by Azure. Productivity and Business Processes revenue increased driven by Microsoft 365 Commercial cloud. More Personal Computing revenue ~~[removed] increased~~ driven by ~~[removed] Gaming and Search and news~~ advertising.

Filing text · FY2026 10-K · filed Jul 29, 2026

Revenue increased [added] $50.1 billion or [added] 18% driven by growth in Microsoft Cloud. Intelligent Cloud revenue increased driven by Azure. Productivity and Business Processes revenue increased driven by Microsoft 365 Commercial cloud. More Personal Computing revenue [added] decreased driven by [added] XBOX (formerly Gaming), offset in part by growth in Search advertising.

Cite this change

"More Personal Computing revenue decreased driven by XBOX (formerly Gaming), offset in part by growth in Search advertising."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

10ChangedItem 7 › OTHER INCOME (EXPENSE), NET

Summary · quote-checked

Interest income, interest expense, investment results, derivative results, and other income shifted from decreases or losses to increases or gains, with different stated drivers.

The paragraph changes the direction of several results and replaces their stated drivers, making the MD&A substance materially different rather than merely updating periods or wording.

Why the model ranked it here

The financial-results discussion changes the direction and drivers of interest, investment, derivative, and other income results.

Filing text · FY2025 10-K · filed Jul 30, 2025

Interest and dividends income ~~[removed] decreased~~ primarily due to ~~[removed] lower portfolio balances. Interest expense decreased primarily due to maturities of commercial paper and higher capitalization of debt~~ interest expense, offset in part by higher ~~[removed] finance lease~~ interest expense. Net recognized ~~[removed] losses~~ on investments increased primarily due to higher ~~[removed] impairments, offset in part by higher~~ gains on equity ~~[removed] investments~~ in the current period. Net ~~[removed] losses~~ on derivatives increased primarily due to ~~[removed] higher losses~~ on equity derivatives in the current period. Other, net primarily reflects net recognized ~~[removed] losses~~ on equity method investments, including OpenAI.

Filing text · FY2026 10-K · filed Jul 29, 2026

Interest and dividends income [added] increased primarily due to [added] higher portfolio balances and higher yields on debt securities. Interest expense increased primarily due to higher finance lease interest expense, offset in part by higher [added] capitalization of debt interest expense. Net recognized [added] gains on investments increased primarily due to higher gains on equity [added] securities and lower impairments in the current period. Net [added] gains on derivatives increased primarily due to [added] gains on equity derivatives in the current [added] period as compared to losses in the prior period. Other, net primarily reflects net recognized [added] gains on equity method investments, including OpenAI.

Cite this change

"Interest and dividends income increased primarily due to higher portfolio balances and higher yields on debt securities."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

11ChangedItem 7 › Reportable Segments

Summary · quote-checked

Cost of revenue shifted from a 1% increase driven by Search and news advertising growth to a 7% decrease driven by lower hardware sales.

The direction of the result and its stated driver both changed, making the MD&A statement substantively different under the rubric.

Filing text · FY2025 10-K · filed Jul 30, 2025

Cost of revenue ~~[removed] increased $346 million or 1%~~ driven by ~~[removed] growth in Search and news advertising.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Cost of revenue [added] decreased $1.8 billion or 7% driven by [added] lower hardware sales.

Cite this change

"Cost of revenue decreased $1.8 billion or 7% driven by lower hardware sales."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

12ChangedItem 7 › General and Administrative

Summary · quote-checked

General and administrative expenses changed from a decrease driven by Gaming and the Activision Blizzard acquisition to an increase driven by legal expenses and prior-period divestiture gains.

The MD&A changes both the direction of expense movement and its stated drivers, making the results narrative substantively different rather than a routine period roll-forward.

Filing text · FY2025 10-K · filed Jul 30, 2025

General and administrative expenses ~~[removed] decreased $386~~ million or ~~[removed] 5%~~ driven by ~~[removed] Gaming, including the impact of the Activision Blizzard acquisition.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

General and administrative expenses [added] increased $733 million or [added] 10% driven by [added] higher legal expenses and gains on divestitures in the prior period.

Cite this change

"General and administrative expenses increased $733 million or 10% driven by higher legal expenses and gains on divestitures in the prior period."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

13ChangedItem 7 › Reportable Segments

Summary · quote-checked

Operating expense growth slowed, and the stated drivers shifted from Gaming and the Activision Blizzard acquisition to Xbox impairments and AI-related investments.

The reported direction remains an increase, but both the figures and the underlying drivers changed, including newly stated impairments and investments in compute capacity, AI talent, and data.

Filing text · FY2025 10-K · filed Jul 30, 2025

Operating expenses increased ~~[removed] $1.3 billion or 9%~~ driven by ~~[removed] Gaming, including the impact of the Activision Blizzard acquisition.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Operating expenses increased [added] $940 million or 6% driven by [added] impairment and other related expenses in our XBOX business and continued investments in research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio.

Cite this change

"Operating expenses increased $940 million or 6% driven by impairment and other related expenses in our XBOX business and continued investments in research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

14ChangedItem 7 › Metrics

Summary · quote-checked

Metrics were updated, including removal of Microsoft 365 Consumer subscribers and discontinuation of previously described metric changes.

The disclosure changes the substance of the metrics discussion by identifying a removed metric and omitting prior metric consolidations and strategic alignment changes.

Filing text · FY2025 10-K · filed Jul 30, 2025

In the first quarter of fiscal year ~~[removed] 2025,~~ we made updates to our metrics ~~[removed] in connection with the segment changes described above. These changes align our metrics~~ with how we manage and monitor certain businesses. ~~[removed] The key change was bringing the commercial components of Microsoft 365 together and creating a new~~ Microsoft 365 [removed] Commercial cloud revenue growth metric. Other changes include combining Windows OEM and Devices into a single revenue growth metric that brings revenue from PC market-driven businesses together, as well as elevating our cloud revenue growth metrics to align to our strategic focus on cloud growth.

Filing text · FY2026 10-K · filed Jul 29, 2026

In the first quarter of fiscal year [added] 2026, we made updates to our metrics [added] to align with how we manage and monitor certain businesses. [added] As part of these updates, Microsoft 365 [added] Consumer subscribers was removed as a metric.

Cite this change

"As part of these updates, Microsoft 365 Consumer subscribers was removed as a metric."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

15ChangedItem 7 › Reportable Segments

Summary · quote-checked

Gross margin growth decreased, and its stated drivers changed from broad business growth to Search advertising, Windows OEM, and sales mix.

The reported increase changed from $3.5 billion or 13% to $1.2 billion or 4%, while management replaced broad growth drivers with specific business and mix explanations.

Filing text · FY2025 10-K · filed Jul 30, 2025

Gross margin increased ~~[removed] $3.5~~ billion or ~~[removed] 13% with growth across all businesses.~~ Gross margin percentage increased ~~[removed] with improvement across all~~ businesses.

Filing text · FY2026 10-K · filed Jul 29, 2026

Gross margin increased [added] $1.2 billion or [added] 4% driven by growth in Search advertising and Windows OEM. Gross margin percentage increased [added] driven by sales mix shift to higher margin businesses.

Cite this change

"Gross margin increased $1.2 billion or 4% driven by growth in Search advertising and Windows OEM. Gross margin percentage increased driven by sales mix shift to higher margin businesses."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

16ChangedItem 7 › Sales and Marketing

Summary · quote-checked

Sales and marketing expense growth changed from Gaming and the Activision Blizzard acquisition to higher Copilot advertising expenses, with revised amounts and percentages.

The stated drivers changed, replacing acquisition-related Gaming investments with Copilot advertising expenses; under the MD&A rule, a changed driver is material.

Filing text · FY2025 10-K · filed Jul 30, 2025

Sales and marketing expenses increased ~~[removed] $1.2~~ billion or ~~[removed] 5%~~ driven by investments in commercial sales and ~~[removed] Gaming, including the impact of the Activision Blizzard acquisition.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Sales and marketing expenses increased [added] $1.1 billion or [added] 4% driven by investments in commercial sales and [added] higher Copilot advertising expenses.

Cite this change

"Sales and marketing expenses increased $1.1 billion or 4% driven by investments in commercial sales and higher Copilot advertising expenses."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

17ChangedItem 7 › SUMMARY RESULTS OF OPERATIONS

Summary · quote-checked

Operating income growth increased, while the explanation changed from growth across all segments to growth in two named segments.

The percentage and amount changed, and the stated drivers changed from all segments to Productivity and Business Processes and Intelligent Cloud, making the MD&A assertion substantively different.

Filing text · FY2025 10-K · filed Jul 30, 2025

Operating income increased ~~[removed] $19.1~~ billion or ~~[removed] 17% with growth across each of our segments.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Operating income increased [added] $26.7 billion or [added] 21% driven by growth in Productivity and Business Processes and Intelligent Cloud.

Cite this change

"Operating income increased $26.7 billion or 21% driven by growth in Productivity and Business Processes and Intelligent Cloud."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

18ChangedItem 7 › OVERVIEW

Summary · quote-checked

Xbox content and services revenue changed from a 16% increase to a 5% decrease, with capitalization also changing.

The revenue direction reverses from increased to decreased, substantively changing the MD&A result; capitalization is merely wording.

Filing text · FY2025 10-K · filed Jul 30, 2025

~~[removed] Xbox~~ content and services revenue ~~[removed] increased 16%.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

[added] XBOX content and services revenue [added] decreased 5%.

Cite this change

"XBOX content and services revenue decreased 5%."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

19ChangedItem 7 › Reportable Segments

Summary · quote-checked

Operating expense growth increased, with expanded disclosure of research, development, AI, data, commercial sales, and Copilot advertising investments.

The reported increase changed from 4% to 9%, and the stated drivers were substantially expanded and replaced, including newly identified AI, data, and Copilot advertising expenses.

Filing text · FY2025 10-K · filed Jul 30, 2025

Operating expenses increased ~~[removed] $1.1~~ billion or ~~[removed] 4%~~ driven by investments in ~~[removed] cloud and AI engineering and commercial sales.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Operating expenses increased [added] $2.5 billion or [added] 9% driven by [added] continued investments in [added] research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio, as well as investments in commercial sales and higher Copilot advertising expenses.

Cite this change

"Operating expenses increased $2.5 billion or 9% driven by continued investments in research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio, as well as investments in commercial sales and higher Copilot advertising expenses."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

20ChangedItem 7 › OVERVIEW

Summary · quote-checked

The disclosure shifts from total server products and cloud services revenue growth driven by Azure to Azure and other cloud services revenue growth alone.

The reported scope, growth rate, and stated driver changed, so this is substantively different from a period-only or routine numerical update.

Filing text · FY2025 10-K · filed Jul 30, 2025

~~[removed] Server products and cloud services revenue increased 23% driven by~~ Azure and other cloud services revenue ~~[removed] growth of 34%.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Azure and other cloud services revenue [added] increased 41%.

Cite this change

"Azure and other cloud services revenue increased 41%."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

21ChangedItem 7 › SUMMARY RESULTS OF OPERATIONS

Summary · quote-checked

The gross-margin decline is attributed to AI infrastructure investments and product usage, rather than Intelligent Cloud, with Microsoft Cloud efficiency gains replacing More Personal Computing as an offset.

The stated drivers of the margin change were replaced, introducing AI investment and usage effects and changing the offsetting factor; this is substantive under the MD&A rule.

Filing text · FY2025 10-K · filed Jul 30, 2025

Gross margin percentage decreased slightly driven by ~~[removed] Intelligent Cloud,~~ offset in part by ~~[removed] More Personal Computing.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Gross margin percentage decreased slightly driven by [added] continued investments in AI infrastructure and growing AI product usage, offset in part by [added] efficiency gains across the Microsoft Cloud.

Cite this change

"Gross margin percentage decreased slightly driven by continued investments in AI infrastructure and growing AI product usage, offset in part by efficiency gains across the Microsoft Cloud."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

22ChangedItem 7 › Reportable Segments

Summary · quote-checked

Cost of revenue growth increased, and its stated driver changed from Azure growth to AI infrastructure investments supporting customer demand.

The change adds a different substantive cost driver and changes the reported increase, so the MD&A explanation is not merely a period roll-forward.

Filing text · FY2025 10-K · filed Jul 30, 2025

Cost of revenue increased ~~[removed] $10.6~~ billion or ~~[removed] 36%~~ driven by ~~[removed] growth in Azure.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Cost of revenue increased [added] $17.7 billion or [added] 44% driven by [added] investments in AI infrastructure to support growing customer demand.

Cite this change

"Cost of revenue increased $17.7 billion or 44% driven by investments in AI infrastructure to support growing customer demand."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

23ChangedItem 7 › OVERVIEW

Summary · quote-checked

The disclosure shifts from total Dynamics products and cloud services revenue growth and its driver to Dynamics 365 revenue growth alone, with a different percentage.

The revenue scope changes and the stated driver is removed; this is substantively different from merely rolling forward a period or updating a figure.

Filing text · FY2025 10-K · filed Jul 30, 2025

Dynamics ~~[removed] products and cloud services~~ revenue increased ~~[removed] 15% driven by Dynamics 365 revenue growth of 19%.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Dynamics [added] 365 revenue increased [added] 18%.

Cite this change

"Dynamics 365 revenue increased 18%."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

24ChangedItem 7 › OVERVIEW

Summary · quote-checked

Windows OEM and Devices revenue changed from increasing 3% to decreasing slightly.

The statement reverses the reported revenue direction, substantively changing the MD&A results narrative beyond a period or figure update.

Filing text · FY2025 10-K · filed Jul 30, 2025

Windows OEM and Devices revenue ~~[removed] increased 3%.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Windows OEM and Devices revenue [added] decreased slightly.

Cite this change

"Windows OEM and Devices revenue decreased slightly."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

25ChangedItem 7 › SUMMARY RESULTS OF OPERATIONS

Summary · quote-checked

Operating expense growth increased, with the stated drivers shifting from cloud, AI engineering, Gaming, and the Activision Blizzard acquisition to multiple new investments and expenses.

The expense increase changed in magnitude and percentage, while the explanation replaced prior drivers with new capacity, talent, data, impairment, sales, and advertising drivers.

Filing text · FY2025 10-K · filed Jul 30, 2025

Operating expenses increased ~~[removed] $3.8~~ billion or ~~[removed] 6%~~ driven by investments in ~~[removed] cloud and AI engineering and Gaming, including the impact of the Activision Blizzard acquisition.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Operating expenses increased [added] $4.9 billion or [added] 7% driven by [added] continued investments in [added] research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio, impairment and other related expenses in our XBOX business, investments in commercial sales, and higher Copilot advertising expenses.

Cite this change

"Operating expenses increased $4.9 billion or 7% driven by continued investments in research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio, impairment and other related expenses in our XBOX business, investments in commercial sales, and higher Copilot advertising expenses."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

26ChangedItem 7 › Reportable Segments

Summary · quote-checked

The explanation for higher operating expenses changed from cloud and AI engineering to specific research, development, talent and data investments.

The MD&A driver changed substantively, adding specific investment categories and a portfolio-wide product-development purpose; this is more than a figure update or wording change.

Filing text · FY2025 10-K · filed Jul 30, 2025

Operating expenses increased ~~[removed] $1.5~~ billion or 7% driven by investments in ~~[removed] cloud and AI engineering.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Operating expenses increased [added] $1.4 billion or 7% driven by [added] continued investments in [added] research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio.

Cite this change

"Operating expenses increased $1.4 billion or 7% driven by continued investments in research and development compute capacity, AI talent, and data to support product development that benefits the entire portfolio."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

27ChangedItem 7 › Reportable Segments

Summary · quote-checked

Cost of revenue growth changed in amount, percentage, and stated driver, from Microsoft 365 Commercial cloud growth to AI infrastructure investments supporting Copilot growth.

The stated driver changed substantively from Commercial cloud growth to AI infrastructure investments supporting Copilot seat and usage growth, changing the explanation of the expense increase.

Filing text · FY2025 10-K · filed Jul 30, 2025

Cost of revenue increased ~~[removed] $2.8~~ billion or ~~[removed] 14%~~ driven by ~~[removed] growth in~~ Microsoft 365 ~~[removed] Commercial cloud.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Cost of revenue increased [added] $2.6 billion or [added] 12% driven by [added] investments in AI infrastructure to support Microsoft 365 [added] Copilot seat and usage growth.

Cite this change

"Cost of revenue increased $2.6 billion or 12% driven by investments in AI infrastructure to support Microsoft 365 Copilot seat and usage growth."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

28ChangedItem 7 › OVERVIEW

Summary · quote-checked

The disclosure shifts from total Microsoft 365 Commercial products and cloud services revenue to Microsoft 365 Commercial cloud revenue, with a higher reported increase.

The metric changes and the stated growth rate changes from 14% to 17%, so the MD&A asserts a substantively different revenue result rather than merely rolling forward figures.

Filing text · FY2025 10-K · filed Jul 30, 2025

Microsoft 365 Commercial ~~[removed] products and cloud services~~ revenue increased ~~[removed] 14% driven by Microsoft 365 Commercial cloud revenue growth of 15%.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Microsoft 365 Commercial [added] cloud revenue increased [added] 17%.

Cite this change

"Microsoft 365 Commercial cloud revenue increased 17%."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

29ChangedItem 7 › Research and Development

Summary · quote-checked

R&D expense growth drivers changed from cloud, AI engineering, Gaming, and the Activision Blizzard acquisition to compute capacity, AI talent, data, and Xbox-related expenses.

The MD&A changes the stated drivers and adds impairment and other related Xbox expenses, making the explanation substantively different beyond updated figures and percentages.

Filing text · FY2025 10-K · filed Jul 30, 2025

Research and development expenses increased ~~[removed] $3.0~~ billion or ~~[removed] 10%~~ driven by investments in ~~[removed] cloud and AI engineering and Gaming, including the impact of the Activision Blizzard acquisition.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Research and development expenses increased [added] $3.1 billion or [added] 9% driven by [added] continued investments in [added] compute capacity, AI talent, and data to support product development that benefits the entire portfolio, as well as impairment and other related expenses in our XBOX business.

Cite this change

"Research and development expenses increased $3.1 billion or 9% driven by continued investments in compute capacity, AI talent, and data to support product development that benefits the entire portfolio, as well as impairment and other related expenses in our XBOX business."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

30ChangedItem 7 › OVERVIEW

Summary · quote-checked

The disclosure shifts from 11% growth in Microsoft 365 Consumer products and cloud services, driven by cloud growth, to 28% cloud revenue growth alone.

The reported scope, growth rate and explanatory structure changed, so the paragraph asserts a substantively different revenue result rather than merely rolling forward a figure.

Filing text · FY2025 10-K · filed Jul 30, 2025

Microsoft 365 Consumer ~~[removed] products and cloud services~~ revenue increased ~~[removed] 11% driven by Microsoft 365 Consumer cloud revenue growth of 11%.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Microsoft 365 Consumer [added] cloud revenue increased [added] 28%.

Cite this change

"Microsoft 365 Consumer cloud revenue increased 28%."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

31ChangedItem 7 › Reportable Segments

Summary · quote-checked

Search and news advertising was narrowed to search advertising, with lower growth rates and a newly stated benefit from third-party partnerships.

The disclosure changes the reported revenue scope, growth rates, and stated drivers, including adding third-party partnerships; this is substantively different from the prior explanation.

Filing text · FY2025 10-K · filed Jul 30, 2025

Search ~~[removed] and news~~ advertising revenue increased ~~[removed] $1.6~~ billion or ~~[removed] 13%. Search and news~~ advertising revenue excluding traffic acquisition costs increased ~~[removed] 20%~~ driven by higher search volume and ~~[removed] higher~~ revenue per ~~[removed] search.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Search advertising revenue increased [added] $1.3 billion or [added] 9%. Search advertising revenue excluding traffic acquisition costs increased [added] 12% driven by higher search volume and revenue per [added] search, as well as benefit from third-party partnerships.

Cite this change

"Search advertising revenue increased $1.3 billion or 9%. Search advertising revenue excluding traffic acquisition costs increased 12% driven by higher search volume and revenue per search, as well as benefit from third-party partnerships."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

32ChangedItem 7 › SUMMARY RESULTS OF OPERATIONS

Summary · quote-checked

Microsoft Cloud gross margin percentage fell from 69% to 66%, with revised AI-related drivers and an expanded offset from efficiency gains.

The change is not merely a rolled-forward figure: the explanation adds growing AI product usage, changes the investment description, and names Microsoft 365 Commercial cloud as an offset.

Filing text · FY2025 10-K · filed Jul 30, 2025

Microsoft Cloud gross margin percentage decreased to ~~[removed] 69%~~ driven by ~~[removed] the impact of scaling our AI infrastructure,~~ offset in part by efficiency gains in ~~[removed] Azure.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Microsoft Cloud gross margin percentage decreased to [added] 66% driven by [added] continued investments in AI infrastructure and growing AI product usage, offset in part by efficiency gains in [added] Azure and Microsoft 365 Commercial cloud.

Cite this change

"Microsoft Cloud gross margin percentage decreased to 66% driven by continued investments in AI infrastructure and growing AI product usage, offset in part by efficiency gains in Azure and Microsoft 365 Commercial cloud."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

33ChangedItem 7 › Reportable Segments

Summary · quote-checked

Enterprise and partner services revenue growth increased, and the prior partial offset from declining Industry Solutions was removed.

The paragraph changes both the reported growth and its stated driver: revenue increased by a larger amount and percentage, without the previously disclosed Industry Solutions decline.

Filing text · FY2025 10-K · filed Jul 30, 2025

Enterprise and partner services revenue increased ~~[removed] $166~~ million or ~~[removed] 2%~~ driven by growth in Enterprise Support ~~[removed] Services, offset in part by a decline in Industry Solutions.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Enterprise and partner services revenue increased [added] $500 million or [added] 6% driven by growth in Enterprise Support [added] Services.

Cite this change

"Enterprise and partner services revenue increased $500 million or 6% driven by growth in Enterprise Support Services."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

34ChangedItem 7 › Reportable Segments

Summary · quote-checked

Windows and Devices revenue shifted from a 2% increase to a 1% decrease, with changed drivers and elevated inventory levels noted.

The reported revenue direction reversed, the stated drivers changed, and the current paragraph adds elevated inventory levels, substantively changing the MD&A disclosure.

Filing text · FY2025 10-K · filed Jul 30, 2025

Windows and Devices revenue ~~[removed] increased $288~~ million or ~~[removed] 2%.~~ Windows OEM and Devices revenue ~~[removed] increased 3%~~ driven by ~~[removed] growth in Windows OEM,~~ offset in part by ~~[removed] a decline in Devices.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Windows and Devices revenue [added] decreased $230 million or [added] 1%. Windows OEM and Devices revenue [added] decreased slightly driven by [added] a decline in Devices, offset in part by [added] Windows OEM growth of 5% with inventory levels that remained elevated.

Cite this change

"Windows and Devices revenue decreased $230 million or 1%. Windows OEM and Devices revenue decreased slightly driven by a decline in Devices, offset in part by Windows OEM growth of 5% with inventory levels that remained elevated."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

35ChangedItem 7 › Effective Tax Rate

Summary · quote-checked

The effective tax rate rose from 18% in both prior years to 19% in fiscal 2026, with the filing now describing an increase.

The changed rate and stated direction alter the MD&A’s substantive description of tax expense, while the underlying earnings-mix driver remains the same.

Filing text · FY2025 10-K · filed Jul 30, 2025

Our effective tax rate for ~~[removed] both~~ fiscal years ~~[removed] 2025 and 2024 was 18%. Our effective tax rate for the fiscal year ended June 30, 2025~~ was primarily ~~[removed] impacted by~~ changes in the mix of our earnings and tax expenses between the U.S. and foreign countries.

Filing text · FY2026 10-K · filed Jul 29, 2026

Our effective tax rate for fiscal years [added] 2026 and 2025 was 19% and 18%, respectively. The increase in our effective tax rate was primarily [added] due to changes in the mix of our earnings and tax expenses between the U.S. and foreign countries.

Cite this change

"Our effective tax rate for fiscal years 2026 and 2025 was 19% and 18%, respectively."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

36ChangedItem 7 › General and Administrative

Summary · quote-checked

Removed disclosure that general and administrative expenses included employee severance expense incurred as part of a corporate program.

The change removes a specific expense category and reference to a corporate severance program, altering the substance of the expense disclosure rather than merely rephrasing it.

Filing text · FY2025 10-K · filed Jul 30, 2025

General and administrative expenses include payroll, employee benefits, stock-based compensation expense, ~~[removed] employee severance expense incurred as part of a corporate program,~~ and other headcount-related expenses associated with finance, legal, facilities, certain human resources and other administrative personnel, certain taxes, and legal and other administrative fees.

Filing text · FY2026 10-K · filed Jul 29, 2026

General and administrative expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with finance, legal, facilities, certain human resources and other administrative personnel, certain taxes, and legal and other administrative fees.

Cite this change

"General and administrative expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with finance, legal, facilities, certain human resources and other administrative personnel, certain taxes, and legal and other administrative fees."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

37ChangedItem 7 › SUMMARY RESULTS OF OPERATIONS

Summary · quote-checked

The recurring results table rolled forward to the new fiscal year and added adjusted net income and adjusted diluted earnings per share metrics.

The period and reported figures are routine roll-forwards, but newly disclosed non-GAAP metrics add substantive financial information beyond updated values in the recurring table.

Filing text · FY2025 10-K · filed Jul 30, 2025

|(In millions, except percentages and per share amounts) | ~~[removed] 2025 | 2024~~ | Percentage Change||Revenue | $ | ~~[removed] 281,724~~ | $ | ~~[removed] 245,122 | 15%~~Gross margin | ~~[removed] 193,893 | 171,008 | 13%~~Operating income | ~~[removed] 128,528 | 109,433 | 17%~~Net income | ~~[removed] 101,832 | 88,136 | 16%~~Diluted earnings per share | 13.64 | ~~[removed] 11.80 | 16%~~||

Filing text · FY2026 10-K · filed Jul 29, 2026

|(In millions, except percentages and per share amounts) | 2026 | 2025 | Percentage Change||Revenue | $ | 331,839 | $ | 281,724 | 18%Gross margin | 225,465 | 193,893 | 16%Operating income | 155,237 | 128,528 | 21%Net income | 133,749 | 101,832 | 31%Diluted earnings per share | 17.95 | 13.64 | 32%|Adjusted net income (non-GAAP) | 128,786 | 105,452 | 22%Adjusted diluted earnings per share (non-GAAP) | 17.28 | 14.13 | 22%||

Cite this change

"Adjusted net income (non-GAAP) | 128,786 | 105,452 | 22%"

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

38ChangedItem 7 › Reportable Segments

Summary · quote-checked

Dynamics revenue retained the same growth rate, but the reported dollar increase and Dynamics on-premises decline were changed or omitted.

The paragraph removes a stated offsetting decline in on-premises products and changes reported revenue growth figures, altering the explanation of the result.

Filing text · FY2025 10-K · filed Jul 30, 2025

Dynamics products and cloud services revenue increased ~~[removed] $996 million~~ or 15% driven by growth in Dynamics ~~[removed] 365, offset in part by a decline in Dynamics on-premises products.~~ Dynamics 365 revenue grew ~~[removed] 19%~~ with growth across all workloads.

Filing text · FY2026 10-K · filed Jul 29, 2026

Dynamics products and cloud services revenue increased [added] $1.2 billion or 15% driven by growth in Dynamics [added] 365. Dynamics 365 revenue grew [added] 18% with growth across all workloads.

Cite this change

"Dynamics products and cloud services revenue increased $1.2 billion or 15% driven by growth in Dynamics 365."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

39ChangedItem 7 › Reportable Segments

Summary · quote-checked

Microsoft 365 Consumer revenue growth figures changed, subscriber growth was revised, and the prior price-increase driver was removed.

The MD&A changes reported growth and subscriber figures and replaces the stated revenue driver, making the results narrative substantively different rather than a period roll-forward.

Filing text · FY2025 10-K · filed Jul 30, 2025

Microsoft 365 Consumer products and cloud services revenue increased ~~[removed] $756 million or 11%.~~ Microsoft 365 Consumer cloud revenue grew ~~[removed] 11%~~ driven by ~~[removed] Microsoft 365 Consumer subscriber growth of 8% to 89.0 million, as well as~~ growth in revenue per user ~~[removed] from the price increase announced in January 2025.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Microsoft 365 Consumer products and cloud services revenue increased [added] $1.8 billion or 24%. Microsoft 365 Consumer cloud revenue grew [added] 28% driven by growth in revenue per user [added] and Microsoft 365 Consumer subscriber growth of 7%.

Cite this change

"Microsoft 365 Consumer cloud revenue grew 28% driven by growth in revenue per user and Microsoft 365 Consumer subscriber growth of 7%."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

40ChangedItem 7 › Reportable Segments

Summary · quote-checked

Gross margin growth figures changed, and the explanation for lower gross margin percentage added continued AI investment and a sales mix shift to Azure.

The stated drivers changed substantively: scaling AI infrastructure was replaced by continued AI infrastructure investment and sales mix shift to Azure, alongside updated figures.

Filing text · FY2025 10-K · filed Jul 30, 2025

Gross margin increased ~~[removed] $8.2~~ billion or ~~[removed] 14%~~ driven by growth in Azure. Gross margin percentage decreased driven by the ~~[removed] impact of scaling our AI infrastructure,~~ offset in part by efficiency gains in Azure.

Filing text · FY2026 10-K · filed Jul 29, 2026

Gross margin increased [added] $13.8 billion or [added] 21% driven by growth in Azure. Gross margin percentage decreased driven by the [added] continued investments in AI infrastructure as well as sales mix shift to Azure, offset in part by efficiency gains in Azure.

Cite this change

"Gross margin percentage decreased driven by the continued investments in AI infrastructure as well as sales mix shift to Azure, offset in part by efficiency gains in Azure."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

41ChangedItem 7 › Reportable Segments

Summary · quote-checked

Server and cloud revenue growth accelerated, while server products shifted from declining to increasing, with different purchasing drivers disclosed.

The paragraph changes growth rates and, substantively, reverses server products’ direction from decreased to increased and replaces the stated purchasing driver.

Filing text · FY2025 10-K · filed Jul 30, 2025

Server products and cloud services revenue increased ~~[removed] $18.6~~ billion or ~~[removed] 23%~~ driven by Azure and other cloud services. Azure and other cloud services revenue grew ~~[removed] 34%~~ driven by demand for ~~[removed] our portfolio of services.~~ Server products revenue ~~[removed] decreased 3%~~ driven by ~~[removed] a decrease in transactional purchasing with~~ continued customer shift to ~~[removed] cloud offerings.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Server products and cloud services revenue increased [added] $31.0 billion or [added] 31% driven by Azure and other cloud services. Azure and other cloud services revenue grew [added] 41% driven by demand for [added] services across the platform with continued growth across all workloads. Server products revenue [added] increased 1% primarily driven by [added] higher purchases of licenses running in multi-cloud environments, offset in part by continued customer shift to [added] cloud.

Cite this change

"Server products revenue increased 1% primarily driven by higher purchases of licenses running in multi-cloud environments, offset in part by continued customer shift to cloud."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

42ChangedItem 7 › Uncertain Tax Positions

Summary · quote-checked

Removed management’s expectation about resolution timing and anticipated changes to income tax contingencies, while rolling the assessment date forward.

The deleted sentences state management’s outlook on resolution and potential contingency changes, substantively reducing disclosure about tax uncertainty beyond a routine date update.

Filing text · FY2025 10-K · filed Jul 30, 2025

We remain under audit by the IRS for tax years 2014 to 2017. With respect to the audit for tax years 2004 to 2013, on September 26, 2023, we received Notices of Proposed Adjustment ("NOPAs") from the IRS. The primary issues in the NOPAs relate to intercompany transfer pricing. In the NOPAs, the IRS is seeking an additional tax payment of $28.9 billion plus penalties and interest. As of June 30, ~~[removed] 2025,~~ we believe our allowances for income tax contingencies are adequate. We disagree with the proposed adjustments and will vigorously contest the NOPAs through the IRS's administrative appeals office and, if necessary, judicial proceedings.[removed] We do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our income tax contingencies for these issues within the next 12 months.

Filing text · FY2026 10-K · filed Jul 29, 2026

We remain under audit by the IRS for tax years 2014 to 2017. With respect to the audit for tax years 2004 to 2013, on September 26, 2023, we received Notices of Proposed Adjustment ("NOPAs") from the IRS. The primary issues in the NOPAs relate to intercompany transfer pricing. In the NOPAs, the IRS is seeking an additional tax payment of $28.9 billion plus penalties and interest. As of June 30, [added] 2026, we believe our allowances for income tax contingencies are adequate. We disagree with the proposed adjustments and will vigorously contest the NOPAs through the IRS's administrative appeals office and, if necessary, judicial proceedings.

Cite this change

"We disagree with the proposed adjustments and will vigorously contest the NOPAs through the IRS's administrative appeals office and, if necessary, judicial proceedings."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

43ChangedItem 7 › Reportable Segments

Summary · quote-checked

Gross margin growth increased, while gross margin percentage shifted from a slight decrease to increase with different stated drivers.

The direction of margin percentage changed, and the stated drivers shifted from AI infrastructure scaling to efficiency gains, investments, and growing AI product usage.

Filing text · FY2025 10-K · filed Jul 30, 2025

Gross margin increased ~~[removed] $11.2~~ billion or ~~[removed] 13%~~ driven by growth in Microsoft 365 Commercial cloud. Gross margin percentage ~~[removed] decreased~~ slightly primarily driven by ~~[removed] the impact of scaling our AI infrastructure,~~ offset in part by ~~[removed] efficiency gains in Microsoft 365 Commercial cloud.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Gross margin increased [added] $16.6 billion or [added] 17% driven by growth in Microsoft 365 Commercial cloud. Gross margin percentage [added] increased slightly primarily driven by [added] efficiency gains in Microsoft 365 Commercial cloud, offset in part by [added] continued investments in AI infrastructure and growing AI product usage.

Cite this change

"Gross margin percentage increased slightly primarily driven by efficiency gains in Microsoft 365 Commercial cloud, offset in part by continued investments in AI infrastructure and growing AI product usage."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

44ChangedItem 7 › Reportable Segments

Summary · quote-checked

Microsoft 365 Commercial growth rates changed, and Microsoft 365 Copilot and Microsoft 365 E5 were added as drivers of cloud revenue per user.

The change includes altered growth rates and a substantive change in stated revenue drivers, including newly named products tied to revenue per user.

Filing text · FY2025 10-K · filed Jul 30, 2025

Microsoft 365 Commercial products and cloud services revenue increased ~~[removed] $10.8~~ billion or ~~[removed] 14%.~~ Microsoft 365 Commercial cloud revenue grew ~~[removed] 15% with~~ Microsoft 365 ~~[removed] Commercial seat growth of~~ 6% driven by small and medium businesses and frontline worker ~~[removed] offerings, as well as growth in revenue per user.~~ Microsoft 365 Commercial products revenue grew ~~[removed] 7%~~ driven by the Windows Commercial on-premises components of Microsoft 365 suite ~~[removed] sales and~~ an increase in Office ~~[removed] transactional purchasing with the launch of Office 2024.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Microsoft 365 Commercial products and cloud services revenue increased [added] $14.2 billion or [added] 16%. Microsoft 365 Commercial cloud revenue grew [added] 17% with growth in revenue per user driven by Microsoft 365 [added] Copilot and Microsoft 365 E5. Microsoft 365 Commercial seats grew 6% driven by small and medium businesses and frontline worker [added] offerings. Microsoft 365 Commercial products revenue grew [added] 13% driven by [added] growth in the Windows Commercial on-premises components of Microsoft 365 suite [added] sales, as well as an increase in Office [added] 2024 transactional purchasing.

Cite this change

"Microsoft 365 Commercial cloud revenue grew 17% with growth in revenue per user driven by Microsoft 365 Copilot and Microsoft 365 E5. Microsoft 365 Commercial seats grew 6% driven by small and medium businesses and frontline worker offerings."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

45ChangedItem 7 › More Personal Computing

Summary · quote-checked

The metric definition changed from search and news advertising with news partners to search advertising with content partners; Xbox capitalization was also updated.

Removing news advertising and news partners while adding content partners changes the disclosed revenue category and its stated scope, exceeding a purely stylistic edit.

Filing text · FY2025 10-K · filed Jul 30, 2025

|Windows OEM and Devices revenue growth | Revenue from sales of Windows Pro and non-Pro licenses sold through the OEM channel and sales of first-party Devices, including Surface and PC accessories|~~[removed] Xbox~~ content and services revenue growth | Revenue from ~~[removed] Xbox~~ content and services, comprising first- and third-party content (including games and in-game content), ~~[removed] Xbox~~ Game Pass and other subscriptions, ~~[removed] Xbox~~ Cloud Gaming, advertising, and other cloud services|Search ~~[removed] and news~~ advertising revenue (ex TAC) growth | Revenue from search ~~[removed] and news~~ advertising excluding traffic acquisition costs ("TAC") paid to Bing Ads network publishers and ~~[removed] news~~ partners

Filing text · FY2026 10-K · filed Jul 29, 2026

|Windows OEM and Devices revenue growth | Revenue from sales of Windows Pro and non-Pro licenses sold through the OEM channel and sales of first-party Devices, including Surface and PC accessories|XBOX content and services revenue growth | Revenue from XBOX content and services, comprising first- and third-party content (including games and in-game content), XBOX Game Pass and other subscriptions, XBOX Cloud Gaming, advertising, and other cloud services|Search advertising revenue (ex TAC) growth | Revenue from search advertising excluding traffic acquisition costs ("TAC") paid to Bing Ads network publishers and content partners

Cite this change

"Search advertising revenue (ex TAC) growth | Revenue from search advertising excluding traffic acquisition costs ("TAC") paid to Bing Ads network publishers and content partners"

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

46ChangedItem 7 › Economic Conditions, Challenges, and Risks

Summary · quote-checked

Foreign exchange fluctuations changed from having no material impact on reported revenue and expenses to increasing revenue while not materially affecting expenses.

The statement changes the reported effect and direction for revenue, while retaining no material impact for expenses; this is a substantive MD&A result change, not merely a period roll-forward.

Filing text · FY2025 10-K · filed Jul 30, 2025

Our international operations provide a significant portion of our total revenue and expenses. Many of these revenue and expenses are denominated in currencies other than the U.S. dollar. As a result, changes in foreign exchange rates may significantly affect revenue and expenses. Fluctuations in the U.S. dollar relative to certain foreign currencies did not have a material impact on reported ~~[removed] revenue and~~ expenses from our international operations in fiscal year ~~[removed] 2025.~~

Filing text · FY2026 10-K · filed Jul 29, 2026

Our international operations provide a significant portion of our total revenue and expenses. Many of these revenue and expenses are denominated in currencies other than the U.S. dollar. As a result, changes in foreign exchange rates may significantly affect revenue and expenses. Fluctuations in the U.S. dollar relative to certain foreign currencies [added] increased reported revenue and did not have a material impact on reported expenses from our international operations in fiscal year [added] 2026.

Cite this change

"Fluctuations in the U.S. dollar relative to certain foreign currencies increased reported revenue and did not have a material impact on reported expenses from our international operations in fiscal year 2026."

Microsoft, Form 10-K for FY2026, Item 7, accession 0001193125-26-323660, filed 29 July 2026.

Filing: https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm

Comparison: https://yearover.com/reports/msft/0001193125-26-323660?ref=quote

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