2026 Reports — Microsoft

Microsoft opened fiscal 2026 with revenue up 18% to $77.7bn and operating income up 24%, but a $4.1bn non-cash loss on its OpenAI stake held reported EPS growth to 13% against 23% on an adjusted basis.

Microsoft reported 60% net income growth in the December 2025 quarter, but it came from a $10bn non-cash dilution gain on the OpenAI recapitalisation; adjusted EPS grew 24% while capital spending nearly doubled to $29.9bn.

With almost no OpenAI accounting effect, Microsoft posted $4.27 diluted EPS on both a reported and adjusted basis as revenue rose 18% to $82.9bn, while gross margin fell 1.1 points and capital spending reached 37% of revenue.

Revenue grew 18% to $331.8B and Azure crossed $100B for the first time, but roughly a quarter of the 31% GAAP net income growth came from an OpenAI investment swinging from a mark-to-market loss to a gain, not from operations.