Microsoft's annual revenue rises 18% to $331.84 billion as Xbox revenue falls 7%

Written by Claude Sonnet 5.5, an AI model, from public records. Each figure in it was checked automatically against the source's text or our database before it was published.

Microsoft reported revenue of $331.84 billion for its fiscal year ended Jun 30, 2026, up 18% from $281.72 billion a year earlier. The figures come from its Form 10-K, the annual report a US-listed company files with the SEC, which Microsoft filed on Jul 29. Operating income, the profit from running the business before interest and tax, rose 21% to $155.24 billion. Net income rose 31% to $133.75 billion, or $17.95 a share on a diluted basis, against $13.64 a year earlier.1^,2^,3^,4^,5^,6^,7^,8^,9^,10^,11^,12

Xbox went the other way. The filing tags $21.79 billion of revenue to Xbox for the year, down 7% from $23.46 billion. Microsoft's discussion puts the fall at $1.7 billion and attributes it to declines in both content and services and hardware. Content and services, which Microsoft defines to cover first- and third-party games and in-game content, Game Pass and other subscriptions, cloud gaming, advertising and other cloud services, fell 5%. Microsoft says the fall came against a prior-year comparison that benefited from strong first-party content performance, and was offset in part by growth in Game Pass. Xbox hardware revenue fell 29%, which Microsoft attributes to a lower volume of consoles sold.13^,14^,15^,16^,17^,18^,19

Xbox sits in the More Personal Computing segment, whose revenue fell 1% to $54.05 billion. That segment's operating income still rose $220 million, or 2%, while its operating expenses rose 6%, which Microsoft attributes in part to impairment and other related expenses in its Xbox business. The earnings release Microsoft issued with the report lists impairment charges in Xbox among the discrete items that moved the fourth quarter's results against its guidance; in that quarter Xbox content and services revenue fell 10%.20^,21^,22^,23^,24^,25^,26

Net income includes net gains on Microsoft's OpenAI investments, which the company says added $5.0 billion to net income and $0.67 to diluted earnings per share. Without them, adjusted net income, a non-GAAP figure that leaves out the OpenAI results, was $128.79 billion, up 22%.27^,28^,29

Microsoft Gaming is the parent of Activision Blizzard, ZeniMax Media, Mojang Studios and Halo Studios, among other studios. We hold the text of the 10-K's management discussion only, so how its Xbox figures divide among studios or games is not read here, and our records cannot tell whether last year's figures were restated.30^,31^,32^,33^,34^,35