MICROSOFT CORPORATION (MSFT) FY2026 Q1 Statement of Cash Flows

Income StatementCash FlowBalance Sheet

Statement of Cash Flows

2025-07-01 to 2025-09-30

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MICROSOFT CORPORATION cash flow reconciliation, Jul 1, 2025 through Sep 30, 2025One connected Sankey reconciles operating, investing and financing net cash flows through a shared cash pool, from beginning cash to ending cash. Ribbons flow left to right on one dollar scale. Activity totals are dark gray; beginning and ending cash are blue. Cash basis for beginning and ending balances and net cash change: Cash, cash equivalents, and restricted cash. Intermediate calculation bars are lighter gray. Net income is green for profit and red for loss. Identified asset purchases, sales and maturities are blue in either cash direction. Orange marks positive customer-advance and deferred-revenue changes that add to operating cash in the reconciliation. These are net changes, not gross customer receipts. Negative changes are neutral reconciliation adjustments; they do not by themselves identify cash payments. Purple identifies capital transactions such as borrowing, repayments, share issuance and dividends. Free cash flow is a separate comparison, not an added cash flow. Read chart description and values below for full signed amounts, including zero items.Net income → Net cash from operating activities: $27,747,000,000.00Accounts receivable → Operating adjustments reconciliation: $16,490,000,000.00Depreciation, amortization, and other → Operating adjustments reconciliation: $13,061,000,000.00Stock-based compensation expense → Operating adjustments reconciliation: $2,983,000,000.00Deferred income taxes → Operating adjustments reconciliation: $2,491,000,000.00Operating adjustments reconciliation → Net cash from operating activities: $17,310,000,000.00Operating adjustments reconciliation → Other current liabilities: $5,507,000,000.00Operating adjustments reconciliation → Unearned revenue: $5,418,000,000.00Operating adjustments reconciliation → Income taxes: $2,944,000,000.00Operating adjustments reconciliation → Other current assets: $1,162,000,000.00Operating adjustments reconciliation → Net recognized gains on investments and derivatives: $1,007,000,000.00Operating adjustments reconciliation → Accounts payable: $614,000,000.00Operating adjustments reconciliation → Other long-term liabilities: $477,000,000.00Operating adjustments reconciliation → Other long-term assets: $394,000,000.00Operating adjustments reconciliation → Inventories: $192,000,000.00Maturities of investments → investing reconciliation: $6,031,000,000.00Sales of investments → investing reconciliation: $3,262,000,000.00investing reconciliation → Additions to property and equipment: $19,394,000,000.00investing reconciliation → Purchases of investments: $17,671,000,000.00investing reconciliation → Other, net: $6,209,000,000.00investing reconciliation → Acquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets: $578,000,000.00Net cash used in financing activities → financing reconciliation: $11,799,000,000.00Common stock issued → financing reconciliation: $689,000,000.00financing reconciliation → Common stock cash dividends paid: $6,169,000,000.00financing reconciliation → Common stock repurchased: $5,650,000,000.00financing reconciliation → Other, net: $669,000,000.00Net cash used in investing activities → investing reconciliation: $34,559,000,000.00Beginning cash: Cash, cash equivalents, and restricted cash → Cash sources and uses: $30,242,000,000.00Net cash from operating activities → Cash sources and uses: $45,057,000,000.00Cash sources and uses → Exchange-rate effect: $92,000,000.00Cash sources and uses → Ending cash: Cash, cash equivalents, and restricted cash: $28,849,000,000.00Cash sources and uses → Net cash used in investing activities: $34,559,000,000.00Cash sources and uses → Net cash used in financing activities: $11,799,000,000.00Net income: $27,747,000,000.00Net income+$27.75 BDepreciation, amortization, and other: $13,061,000,000.00Depreciation, amort. & other+$13.06 BStock-based compensation expense: $2,983,000,000.00Stock-based compensation+$2.98 BNet recognized gains on investments and derivatives: -$1,007,000,000.00Investment & derivative gain & loss−$1.01 BDeferred income taxes: $2,491,000,000.00Deferred income taxes+$2.49 BAccounts receivable: $16,490,000,000.00Accounts receivable+$16.49 BInventories: -$192,000,000.00Inventories−$192.00 MOther current assets: -$1,162,000,000.00Other current assets−$1.16 BOther long-term assets: -$394,000,000.00Other noncurrent assets−$394.00 MAccounts payable: -$614,000,000.00Accounts payable−$614.00 MUnearned revenue: -$5,418,000,000.00Deferred revenue−$5.42 BIncome taxes: -$2,944,000,000.00Income taxes payable−$2.94 BOther current liabilities: -$5,507,000,000.00Other current liabilities−$5.51 BOther long-term liabilities: -$477,000,000.00Other noncurrent liabilities−$477.00 MNet cash from operating activities: $45,057,000,000.00Operating cash+$45.06 BOperating adjustments reconciliation: $35,025,000,000.00Repayments of debt, maturities of 90 days or less: $0.00Repayments of debt: $0.00Common stock issued: $689,000,000.00Common stock issued+$689.00 MCommon stock repurchased: -$5,650,000,000.00Common stock repurchases−$5.65 BCommon stock cash dividends paid: -$6,169,000,000.00Common dividends paid−$6.17 BOther, net: -$669,000,000.00Other financing, net−$669.00 MNet cash used in financing activities: -$11,799,000,000.00. Cash required to fund net payments.Financing cash−$11.80 Bfinancing reconciliation: $12,488,000,000.00Additions to property and equipment: -$19,394,000,000.00PP&E purchases−$19.39 BAcquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets: -$578,000,000.00Acquisitions & intangible purchases−$578.00 MPurchases of investments: -$17,671,000,000.00Investment purchases−$17.67 BMaturities of investments: $6,031,000,000.00AFS securities maturities+$6.03 BSales of investments: $3,262,000,000.00Sales of investments+$3.26 BOther, net: -$6,209,000,000.00Other investing, net−$6.21 BNet cash used in investing activities: -$34,559,000,000.00. Cash required to fund net payments.Investing cash−$34.56 Binvesting reconciliation: $43,852,000,000.00Cash sources and uses: $75,299,000,000.00Beginning cash: Cash, cash equivalents, and restricted cash: $30,242,000,000.00Beginning cash$30.24 BEnding cash: Cash, cash equivalents, and restricted cash: $28,849,000,000.00Ending cash$28.85 BExchange-rate effect: -$92,000,000.00FX effect−$92.00 MCASH RECONCILIATIONOperatingflowsInvestingflowsFinancingflowsFree cash flow$25.66 BOperating cash − cash spent on PP&ECash flow / Net income1.62×Operating cash flow ÷ net incomeNet cash change−$1.39 BEnding cash − beginning cash
Chart details

MICROSOFT CORPORATION cash flow reconciliation, Jul 1, 2025 through Sep 30, 2025

Cash flows for Jul 1, 2025 through Sep 30, 2025. Cash basis: Cash, cash equivalents, and restricted cash. Beginning cash: Jun 30, 2025. Ending cash: Sep 30, 2025. Beginning and ending cash are dated balances. Positive cash flows add cash; negative cash flows reduce it.

Beginning cash on Jun 30, 2025
30,242,000,000 US dollars. Beginning cash: Cash, cash equivalents, and restricted cash
Operating activities
45,057,000,000 US dollars. Net cash provided.
Net income
27,747,000,000 US dollars
Depreciation, amortization, and other
13,061,000,000 US dollars
Stock-based compensation expense
2,983,000,000 US dollars
Net recognized gains on investments and derivatives
negative 1,007,000,000 US dollars
Deferred income taxes
2,491,000,000 US dollars
Accounts receivable
16,490,000,000 US dollars
Inventories
negative 192,000,000 US dollars
Other current assets
negative 1,162,000,000 US dollars
Other long-term assets
negative 394,000,000 US dollars
Accounts payable
negative 614,000,000 US dollars
Unearned revenue
negative 5,418,000,000 US dollars
Income taxes
negative 2,944,000,000 US dollars
Other current liabilities
negative 5,507,000,000 US dollars
Other long-term liabilities
negative 477,000,000 US dollars
Investing activities
negative 34,559,000,000 US dollars. Net cash used.
Additions to property and equipment
negative 19,394,000,000 US dollars
Acquisition of companies, net of cash acquired and divestitures, and purchases of intangible and other assets
negative 578,000,000 US dollars
Purchases of investments
negative 17,671,000,000 US dollars
Maturities of investments
6,031,000,000 US dollars
Sales of investments
3,262,000,000 US dollars
Other, net
negative 6,209,000,000 US dollars
Financing activities
negative 11,799,000,000 US dollars. Net cash used.
Repayments of debt, maturities of 90 days or less
0 US dollars
Repayments of debt
0 US dollars
Common stock issued
689,000,000 US dollars
Common stock repurchased
negative 5,650,000,000 US dollars
Common stock cash dividends paid
negative 6,169,000,000 US dollars
Other, net
negative 669,000,000 US dollars
Operating adjustment reconciliation
35,025,000,000 US dollars. Intermediate calculation joining the operating reconciliation branches. Its gross amount includes any portion of net income routed through this junction. It is not an additional cash source or use.
financing gross reconciliation
12,488,000,000 US dollars. Gross amount at the activity's junction before offsetting its receipts and deductions. It is not an additional cash source or use.
investing gross reconciliation
43,852,000,000 US dollars. Gross amount at the activity's junction before offsetting its receipts and deductions. It is not an additional cash source or use.
Exchange-rate effect
negative 92,000,000 US dollars
Ending cash on Sep 30, 2025
28,849,000,000 US dollars. Ending cash: Cash, cash equivalents, and restricted cash
Cash sources and uses
75,299,000,000 US dollars. Opening cash plus net sources, equal to net uses plus ending cash.
Net cash change
negative 1,393,000,000 US dollars. Ending cash minus beginning cash.
Cash flow / Net income
1.62×. Operating cash flow divided by reconciliation net income for the same period. Black from 0.90× through 1.10×; green above 1.10×; red below 0.90×. Color uses the unrounded ratio.
Operating cash flow
45,057,000,000 US dollars. Operating cash flow used in the free cash flow calculation.
Cash purchases of property, plant and equipment
19,394,000,000 US dollars. These cash purchases are already included in investing activities above.
Free cash flow
25,663,000,000 US dollars. A supplemental measure; finance-lease payments are excluded from this definition.

Chart connections

  • Beginning cash plus operating, investing and financing cash flows plus the exchange-rate effect equals ending cash. Negative amounts reduce cash.
  • Financing contributions meet at a reconciliation junction before connecting to the net cash total.
  • Investing contributions meet at a reconciliation junction before connecting to the net cash total.
  • Operating reconciliation adjustments are not all independent cash receipts.
  • Net income enters operating cash directly in the reconciliation. The adjustment junction contributes the remaining $17.31B after reconciling the other positive and negative adjustments. These connections depict an accounting reconciliation, not traced cash receipts.
  • Each activity has one net cash bar connected to the shared cash pool. Positive activity totals enter the pool; negative activity totals leave the pool to fund that activity's net payments. The central pool does not assign a particular funding source to a particular payment.
  • The intermediate calculation bars include both sides of the displayed activity breakdowns; they are not additional cash flows.
  • Operating cash flow minus cash purchases of property, plant and equipment equals free cash flow: 45,057,000,000 US dollars minus 19,394,000,000 US dollars equals 25,663,000,000 US dollars.
MICROSOFT CORPORATION (MSFT) FY2026 Q1 Statement of Cash Flows Sankey chart
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