Microsoft Corp

Company facts

Industry

Services-Prepackaged Software

Headquarters

Redmond, Washington

Most recent report

8-K, filed Nov 5, 2026

Incorporated

Washington

Filings on record

1,007+ filings

On EDGAR

CIK 789019

Fiscal year ends

June

Filer status

Large accelerated filer

What to read: Sep 2026 10-Q

SECSift found 3 of 11 sections worth reading, with 3 positive, 15 notable, and 5 negative flags.

• Financial Statements (Item 1)

  Contains critical OpenAI investment details, massive lease commitments, and segment restructuring.
  Notable

  • Segment restructure into Agents & Infra and Devices & Consumer, with prior periods recast.
  • OpenAI revenue of $10.0B in Q1 FY2027, up from $4.1B loss in prior year, with $7.2B receivables.
  • OpenAI investment: $12.0B of $13.0B total commitment funded as of Sep 30, 2026.
  • Remaining performance obligations (backlog) of $683B as of Sep 30, 2026, with 30% expected in 12 months.
  • Massive future datacenter lease commitments of $364.6B not yet commenced, spanning FY2027-2034.
  Negative

  • IRS seeking $28.9B in additional tax for 2004-2013 transfer pricing; Microsoft contests.

• Management's Discussion (Item 2)

  Full MD&A with segment results, cash flows, and a $28.9B IRS dispute.
  Positive

  • Commercial remaining performance obligation up 73% to $677B in Q1 FY2027.
  • Azure revenue grew 48% in Q1 FY2027, driven by demand across all workloads.
  • Cash from operations rose $12.9B to $58.0B in Q1 FY2027.
  Notable

  • Segment structure changed in FY2027, creating Agents and Infra and Devices and Consumer.
  • Microsoft Cloud gross margin fell to 66% from sales mix shift to Azure in Q1 FY2027.
  • Net gains from OpenAI investments added $207M to net income in Q1 FY2027.
  • Windows OEM and devices revenue fell 22% in Q1 FY2027 due to prior-year demand pull-forward.
  • Capex surged $20.0B to fund datacenter and AI infrastructure in Q1 FY2027.

• Risk Factors (Item 1A)

  Contains company-specific quantified risks: $28.9B IRS dispute, AI investment scale, supply constraints.
  Notable

  • OpenAI partnership is a long-term strategic relationship; changes could affect competitiveness of AI products.
  • AI models may behave unpredictably; unintended consequences could cause reputational or legal harm.
  • EU AI Act and other regulations may increase costs or restrict AI model operations in certain markets.
  • U.S. tariffs and AI export control changes create uncertainty in supply chain costs and product continuity.
  • Sustainability goals (carbon negative by 2030) challenged by AI energy demands; failure could harm reputation.
  Negative

  • AI investments are 'at significant scale and on an accelerated timeline' ahead of developed revenue; returns may not materialize.
  • Nation-state cyberattacks against Microsoft have increased and may intensify due to transparency about attacks.
  • Power availability limitations could restrict datacenter expansion; energy costs may rise and affect margins.
  • Critical datacenter components (semiconductors, networking, power) face shortages; supply constraints have occurred and may continue.

What changed: Sep 2026 vs. Mar 2026

About 12% of MSFT's Sep 2026 10-Q is new information. 60 paragraphs were added, 178 changed, and 165 removed. Below are the most important lines SECSift identified.

• Item 2 80
• Item 1A 69
• Item 1 56
• Item 4 1
• Item 5 1
• Item 6 1