Microsoft (MSFT) Q2 2026: Revenue $90.01B, Adjusted EPS $4.74

Consensus vs reported

EPS · ADJUSTED BEAT +13%

$4.74

vs $4.21 expected

QoQ+11.0%

YoY+22.8%

Revenue BEAT +3%

$90.01B

vs $87.6B expected

QoQ+8.6%

YoY+17.7%

QoQ and YoY are measured on the same basis as each panel's own consensus, so no panel compares two different measures.

The quarter in short

Revenue $90.01B, up 17.7% year over year and 8.6% on the quarter. Adjusted EPS $4.74, up 22.8% year over year and 11.0% on the quarter. GAAP EPS $4.81. Free cash flow $19.64B, down 23.2% year over year and up 24.3% on the quarter. Adjusted EPS beat consensus by 13%. Rule of 40 score +39.

Reported this quarter

Revenue

$90.01B

QoQ +8.6% YoY +17.7%

EPS · ADJUSTED

$4.74

QoQ +11.0% YoY +22.8%

EPS · GAAP

$4.81

QoQ +12.6% YoY +31.8%

Free Cash Flow

$19.64B

QoQ +24.3% YoY −23.2%

Gross Margin

67.2%

QoQ −0.4 pp YoY −1.4 pp

FCF Margin

21.8%

QoQ +2.8 pp YoY −11.6 pp

P/E Ratio

20.8

QoQ −5.7% YoY −42.8%

Each tile opens the full quarterly series. Download the numbers as CSV or JSON.

What we learned

Two-thirds of the earnings beat was a private mark-up. A $3.2B gain on the Anthropic stake added $0.33 of the roughly $0.50 beat over consensus. Microsoft revalues that stake only when a new financing round prices it, so it is not a quarterly tailwind.
The capex "discipline" is partly a depreciation schedule. Calendar-2026 capex guidance fell to ~$175B from ~$190B, alongside a change spreading long-term data-centre leases over 25 years instead of 15 .
The backlog is the number that needs no interpretation. Commercial RPO of $678B, up $51B in one quarter and 84% year over year — contracted, forward-visible revenue rather than an estimate. It is the strongest single piece of AI demand evidence in the season.
The concentration worry got a specific answer. Amy Hood disclosed that nearly 90% of Microsoft Cloud revenue comes from customers outside the frontier AI labs — a quotable figure against the claim that Azure growth rides on OpenAI.
Not every segment is on the wave. More Personal Computing revenue fell 4.4% to $12.9B , with Windows OEM guided down high-teens for FY2027 on an industry memory-chip shortage — the same cost pressure squeezing hardware supply chains all year.

Coverage around this release

R40 GitHub Was Microsoft's Best Acquisition. SpaceX Just Shipped Cursor's First Gem At It. News · Aug 18, 2026 R40 The AI Capex Bet, Six Months In: What the Mag 7 Actually Spent (and What the Market Learned) News · Jul 30, 2026 R40 Microsoft Q4 FY2026: Azure Hits 43% Growth, Stock Jumps 8.9% — the Hyperscaler That Got It Right News · Jul 29, 2026

Estimate against reported

Our published estimate Reported EPS

Quarter	Estimate	Reported	Surprise
2024 Q3	—	$3.30	—
2024 Q4	—	$3.23	—
2025 Q1	—	$3.46	—
2025 Q2	—	$3.65	—
2025 Q3	—	$3.72	—
2025 Q4	—	$5.16	—
2026 Q1	—	$4.27	—
2026 Q2	$4.21	$4.74	+13%

Estimates are the consensus we published on our own preview for that quarter; quarters we did not preview carry the reported figure only. Where a consensus was set on a non-GAAP basis, the reported column shows that same measure.