Microsoft booked $24.1bn of revenue and $6.0bn of receivables from OpenAI alone — and $329.1bn of data-center leases that have not yet started
FY2026 10-K (June year-end): revenue $331.8bn (+18%), net income $133.7bn. OpenAI is now disclosed as a related party, with its revenue and receivables shown separately; a $6.5bn dilution gain on the OpenAI stake sits in other income. Capex $115.9bn (+80%), finance lease liabilities $66.6bn, commercial RPO $678bn (+84%)
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Microsoft Form 10-K for fiscal 2026 (year ended June 30, 2026): income statement, balance sheet, cash-flow statement, Note 1 'Investments — OpenAI (related party, ASC 850)', Note 3 'Other Income (Expense), Net', Note 13 'Remaining performance obligation', Note 14 'Leases (leases not yet commenced)', MD&A highlights and cash flows
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Microsoft (MSFT) reported revenue of $331,839m for fiscal 2026 (July 2025–June 2026), up 18%, and net income of $133,749m. The annual report (10-K) filed on July 29 classifies OpenAI as a related party under ASC 850 and discloses the revenue and receivables arising from transactions with it. The lease note also records $329.1bn of leases that have not yet commenced.
What happened
Microsoft (MSFT) sells Azure cloud, Office and Windows, and is OpenAI's largest investor.
Its annual report (10-K) for fiscal 2026 (July 1, 2025–June 30, 2026) shows revenue of $331,839m, up 18% from $281,724m, and net income of $133,749m, up 31%. Azure and other cloud services revenue grew 41%, and commercial remaining performance obligation (RPO) rose 84% to $678bn.
Note 1 of this 10-K classifies OpenAI as a related party under ASC 850 and discloses the transactions separately. Revenue from commercial arrangements with OpenAI, inclusive of revenue-sharing payments, was $24.1bn in FY2026, and accounts receivable from OpenAI at June 30 was $6.0bn. Microsoft's total funding commitments to its OpenAI investment are $13.0bn, of which $11.9bn has been funded; the stake is about 25% on an as-converted basis.
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Note 1 of the 10-K says revenue from commercial arrangements with OpenAI, inclusive of revenue-sharing payments, was $24.1bn in FY2026, and accounts receivable from OpenAI at June 30 was $6.0bn. The breakdown (cloud consumption, revenue share, etc.) is not disclosed. What this means for the earnings structure is explained in the subscriber section.
Is the $6.5bn dilution gain cash?
No. It is an accounting gain: Microsoft's percentage fell after the OpenAI recapitalization while the equity-method carrying value rose. The company also presents non-GAAP adjusted net income excluding it. The after-tax effect was $5.0bn of net income, or $0.67 per share.
Are the $329.1bn of leases not yet commenced a liability?
Not yet on the balance sheet. When each lease starts, a lease asset and liability are recorded. The company says some arrangements are subject to contractual conditions and that the leases commence between FY2027 and FY2033 with terms of 1 to 20 years.
Where can I verify these numbers?
On SEC EDGAR: Microsoft's FY2026 Form 10-K (accession 0001193125-26-323660), Note 1 (investments, OpenAI), Note 3 (other income), Note 13 (RPO), Note 14 (leases) and the cash-flow statement.
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Microsoft Form 10-K for fiscal 2026 (year ended June 30, 2026): income statement, balance sheet, cash-flow statement, Note 1 'Investments — OpenAI (related party, ASC 850)', Note 3 'Other Income (Expense), Net', Note 13 'Remaining performance obligation', Note 14 'Leases (leases not yet commenced)', MD&A highlights and cash flows · SEC EDGAR · This article is not investment advice. Disclaimer
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