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How much revenue does Microsoft make, and how should you read the numbers?
Microsoft reported $331.8 billion in FY2026 revenue and $155.2 billion in operating income, up 18% and 21%, respectively, from the prior year. Revenue is the money earned before expenses; operating income is what remains after operating costs. These full-year figures come from Microsoft’s FY2026 Q4 earnings release.
Microsoft’s annual report divides the company into three reportable operating segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Its FY2026 Q4 segment revenues were $37.8 billion, $39.3 billion, and $12.9 billion, respectively. These are quarterly figures, not annual totals. The segments bundle products, and Microsoft also reports measures that cross segment boundaries. In particular, Microsoft Cloud is not a fourth segment.
The detailed FY2025 product-and-service figures below are useful for seeing what sells, but they are not the FY2026 mix. Microsoft had not provided a comparable FY2026 full-year breakdown by every product category in the figures reviewed.
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Which products and services generated Microsoft’s FY2025 revenue?
The following categories are from Microsoft’s FY2025 Annual Report and cover the fiscal year ended June 30, 2025. Amounts are U.S. dollars. They are product and service categories, not a list of Microsoft’s reportable segments.
| FY2025 category | Revenue | What it includes or represents |
|---|---|---|
| Server products and cloud services | $98.435 billion | Server products and cloud services; this category is not Azure revenue alone. |
| Microsoft 365 Commercial products and cloud services | $87.767 billion | Commercial Microsoft 365 products and cloud services. |
| Gaming | $23.455 billion | Gaming hardware, content, subscriptions, and services—not just console sales. |
| $17.812 billion | Includes Talent Solutions, Marketing Solutions, Premium Subscriptions, and Sales Solutions. | |
| Windows and Devices | $17.314 billion | A combined category that includes Windows OEM licensing and Devices, including Surface and PC accessories. |
| Search and news advertising | $13.878 billion | Advertising across Bing and Copilot, Microsoft News, Microsoft Edge, and third-party affiliates. |
| Dynamics products and cloud services | $7.827 billion | Includes Dynamics 365 applications across ERP, CRM, Power Apps, and Power Automate. |
| Enterprise and partner services | $7.760 billion | A separately listed product-and-service revenue category. |
| Microsoft 365 Consumer products and cloud services | $7.404 billion | Consumer Microsoft 365 products and cloud services. |
| Total revenue | $281.724 billion | Microsoft FY2025 total revenue; it is not an additional product category. |
The listed categories help show the breadth of the business, but should not be treated as perfectly interchangeable with segment totals or added to Microsoft Cloud. Microsoft reported Microsoft Cloud revenue of $168.9 billion in FY2025, a cross-business measure that includes Microsoft 365 Commercial cloud, Azure and other cloud services, commercial LinkedIn, and Dynamics 365. It overlaps categories in the table, so adding it to them would double-count revenue.
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How does Azure make money?
Azure earns revenue when customers use Microsoft’s cloud and AI services, along with related consumption-based offerings. Customer spending can reflect workloads running in the cloud, data and AI services, and other cloud capacity. Microsoft’s “Azure and other cloud services” measure is broader than Azure alone: it also includes GitHub cloud services, Nuance Healthcare cloud services, virtual desktop offerings, and other cloud services.
In Q4 FY2026, Azure and other cloud services revenue grew 43% year over year. Microsoft said on its earnings call that demand exceeded available capacity and that new capacity was quickly monetized. That makes capacity investment and timing relevant to growth: demand does not automatically translate into revenue until Microsoft can provide the service. The call also said cloud gross margin was affected by the mix shift toward Azure and AI infrastructure investment; the reported quarter does not establish a fixed margin or future outcome.
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Does Microsoft make money from Office subscriptions?
Yes. Microsoft earns from Microsoft 365 and Office through commercial and consumer products and cloud services. For businesses, revenue can grow as organizations add paid seats or customers spend more per user on higher-value offerings. Microsoft has identified premium offerings and Copilot as contributors that can affect average revenue per user.
In Q4 FY2026, Microsoft 365 Commercial cloud revenue grew 14% on a reported basis, or 16% after adjustment for a prior-year revenue-recognition comparison. Microsoft 365 Consumer cloud revenue grew 24% in that quarter. Those are quarterly cloud growth rates, not full-year revenue figures or the growth rates for every Microsoft 365 product.
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How does Microsoft earn money from Windows and Surface?
PC manufacturers pay Microsoft for Windows licenses, commonly for Windows to be preinstalled on computers they sell. Microsoft also sells its own devices, including Surface PCs and accessories. The FY2025 annual-report figure of $17.314 billion combines Windows and Devices, so it cannot be read as Windows license revenue alone.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Is Xbox Microsoft’s only gaming revenue?
No. Microsoft’s Gaming category includes hardware and a wider range of content and services: first- and third-party games, in-game content, Game Pass and other subscriptions, cloud gaming, advertising, and other cloud services. Game Pass is a subscription offering with a curated library of first- and third-party titles.
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- Brilliant Display – Stunning 13.8" PixelSense touchscreen[1], with brilliant LCD display[2], unleashes luminous whites, deeper blacks and colors so richly saturated bringing vivid life into every frame – perfect for work, school, streaming and creative tasks.
- Power that lasts all day – With 20 hours of battery life[3], the new Surface Laptop powers through your entire day, so you can create, work and stream from morning to night without reaching for a charger.
- Work at the speed of your ideas – Built with the latest Qualcomm Snapdragon X2 Elite (12 Core) processors, Surface Laptop delivers fast, AI‑accelerated performance—making it the most powerful Surface laptop for everything from multitasking to demanding workloads.
- The ports you need – Charge on-the-go, transfer data fast, or create the ultimate desktop set up with two USB-C / USB4[4] ports.
- Built-in AI Companion – Work smarter, create freely, and communicate with confidence—Copilot[5] on Windows 11 is always there to help.
In Q4 FY2026, Xbox content and services revenue declined 10% year over year. That is a result for one quarter and one part of the gaming business, not a full-year Gaming revenue figure or a measure of hardware sales.
Where do LinkedIn, advertising, Dynamics, and services fit?
LinkedIn sells business-oriented products and subscriptions, including recruiting and talent solutions, marketing, premium subscriptions, and sales tools. Its FY2025 revenue was $17.812 billion. Search and news advertising generated $13.878 billion that year through properties that include Bing and Copilot, Microsoft News, and Microsoft Edge, as well as third-party affiliates. In Q4 FY2026, search advertising revenue excluding traffic acquisition costs increased 10% year over year.
Dynamics brings in revenue from business applications and related cloud services, including Dynamics 365 products for enterprise resource planning and customer relationship management, along with Power Apps and Power Automate. Enterprise and partner services are another separately reported FY2025 category. Microsoft Cloud includes Dynamics 365 and commercial LinkedIn, so its cloud total overlaps those businesses rather than representing additional revenue on top of them.
What is the practical takeaway about Microsoft’s business model?
Microsoft combines recurring subscriptions and cloud consumption with OEM licensing, device sales, game purchases and subscriptions, advertising, and business services. The mix spans enterprise and consumer customers, and no single product label captures all of it. Azure is a major growth engine, but the FY2025 detailed table shows substantial revenue from Microsoft 365 and many other lines as well. For an up-to-date top-line view, use FY2026’s $331.8 billion annual revenue; for a category-by-category annual view, use FY2025 figures and keep Microsoft Cloud separate as an overlapping subtotal.
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