What it does
Microsoft describes itself as a technology company focused on making digital technology and AI broadly available and responsibly deployed. Its portfolio includes software, services, devices, and solutions for individuals and businesses. The filing says its offerings span AI, cloud computing, productivity and collaboration, and personal computing. It provides cloud-based AI, software, platforms, content, support, and consulting; sells operating systems, server and business applications, development and management tools, video games, PCs, tablets, consoles, and accessories; and delivers online advertising. The company organizes its business around Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
Source: Microsoft Corporation Form 10-K for fiscal 2026, Item 1 — sec.gov
How it makes money
The filing reports revenue through three segments, shown in the segment table below. Productivity and Business Processes generated $140.0 billion in FY2026 revenue, while Intelligent Cloud generated $137.8 billion and More Personal Computing generated $54.1 billion. Within these businesses, the company says revenue comes from cloud and AI consumption services, software and subscriptions, server products, support and consulting, devices, gaming content and subscriptions, and advertising. Server Products and Cloud Services revenue was $129.4 billion in FY2026, or 43.9% of revenue, according to the product information provided.
| Product or service | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| Server Products and Cloud Services | $129.4 billion | 43.9% | 31.5% |
| Product | $64.7 billion | 22.0% | 1.17% |
| XBOX | $21.8 billion | 7.40% | −7.10% |
| $19.8 billion | 6.73% | 11.3% | |
| Windows and Devices | $17.1 billion | 5.80% | −1.33% |
| Search advertising | $15.2 billion | 5.15% | 9.35% |
| Microsoft 365 Consumer products and cloud services | $9.2 billion | 3.12% | 23.9% |
| Dynamics products and cloud services | $9.0 billion | 3.06% | 15.1% |
| Enterprise and partner services | $8.3 billion | 2.80% | 6.44% |
| Other | $109.0 million | 0.04% | 51.4% |
Source: Microsoft Corporation Form 10-K for fiscal 2026, Item 1 — sec.gov
Customers and geography
The company serves individuals, businesses, developers, enterprises, public-sector organizations, educational institutions, government entities, and consumers. Its direct sales reach large multinational enterprises and public-sector organizations as well as small and medium-sized businesses; indirect channels use partners worldwide. The filing also states that OEMs license and preinstall certain Microsoft software on devices sold to end customers. FY2026 revenue was $170.8 billion in the United States, representing 51.5% of revenue, and $161.0 billion in Other Countries, representing 48.5%.
| Region | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| United States | $170.8 billion | 51.5% | 18.2% |
| Other Countries | $161.0 billion | 48.5% | 17.4% |
Source: Microsoft Corporation Form 10-K for fiscal 2026, Item 1 — sec.gov
Competition
The filing states that Microsoft faces intense competition across its markets and describes competitors by category rather than naming companies. It identifies software, global application, web-based, mobile, AI-first, cloud-service, open-source, cybersecurity, server, consulting, hardware, online-gaming, game-streaming, search-engine, website, social-platform, and portal providers. It also says some device manufacturers are current or potential partners and customers, including Windows OEMs. The company identifies competition for its products and services across Office, Windows, Defender, Enterprise Mobility + Security, LinkedIn, Dynamics, Azure, server products, devices, XBOX, and search advertising.
Source: Microsoft Corporation Form 10-K for fiscal 2026, Item 1 and Item 1A — sec.gov
Key risks
- The filing states that intense competition across product and service markets could adversely affect results of operations.
- Demand for cloud-based and AI products and services is evolving and difficult to forecast.
- Significant investments in products and services may not achieve expected returns.
- Cyberattacks and security vulnerabilities could reduce revenue, increase costs, lead to liability claims, or harm reputation or competitive position.
- The company may be unable to develop and expand adequate infrastructure, including datacenter capacity.
- New, existing, and evolving legal and regulatory requirements could adversely affect results of operations.
Source: Microsoft Corporation Form 10-K for fiscal 2026, Item 1A — sec.gov
People and operations
As of June 30, 2026, Microsoft employed approximately 223,000 people on a full-time basis: 121,000 in the U.S. and 102,000 internationally. The workforce included 89,000 in operations, 77,000 in product research and development, 43,000 in sales and marketing, and 14,000 in general and administration. The company operates a global operations service center covering the Americas, Asia Pacific, Europe, and the Middle East, and operates datacenters throughout these regions. It uses third-party manufacturers for devices and states that few qualified suppliers provide certain server and device components.
Source: Microsoft Corporation Form 10-K for fiscal 2026, Item 1 — sec.gov