What is Microsoft's intelligent cloud — cost of goods sold?

Microsoft (MSFT) reported intelligent cloud — cost of goods sold of $15.12B in Q1 2026.

How has Microsoft's intelligent cloud — cost of goods sold changed year-over-year?

Microsoft's intelligent cloud — cost of goods sold increased by 46.7% year-over-year, from $10.31B to $15.12B.

What is the long-term trend for Microsoft's intelligent cloud — cost of goods sold?

Over 2 years (2023 to 2025), Microsoft's intelligent cloud — cost of goods sold has grown at a 29.1% compound annual growth rate (CAGR), from $24.11B to $40.17B.

What does intelligent cloud — cost of goods sold mean?

The direct costs, such as data center electricity and server hardware expenses, required to run Microsoft's cloud and server business.

Business Segments · Cost of Goods Sold

Intelligent Cloud — Cost of Goods Sold

Microsoft Intelligent Cloud — Cost of Goods Sold increased by 11.5% to $15.12B in Q1 2026 compared to the prior quarter. Year-over-year, this metric grew by 46.7%, from $10.31B to $15.12B. Over 2 years (FY 2023 to FY 2025), Intelligent Cloud — Cost of Goods Sold shows an upward trend with a 29.1% CAGR. This increase may warrant attention — for this metric, lower values are generally preferred.

Analysis

StatementSegment

CategoryProfitability

SignalLower is better

VolatilityModerate

First reportedQ1 2023

Last reportedQ3 2026Apr 29, 2026

Rolls up toTotal Cost of Revenue

How to read this metric

An increase relative to revenue may signal rising energy costs or heavy front-loaded depreciation from AI infrastructure investments, while a decrease suggests improved operational efficiency and economies of scale.

Detailed definition

This metric represents the direct costs associated with generating revenue within Microsoft's Intelligent Cloud segment,...

Peer comparison

Similar to the cost of revenue for Amazon Web Services (AWS) or Google Cloud's cost of sales.

Metric ID: msft_segment_intelligent_cloud_cost_of_goods_and_services_sold

Historical Data

15 periods

	Q1 '23	Q2 '23	Q3 '23	Q4 '23	Q1 '24	Q2 '24	Q3 '24	Q4 '24	Q1 '25	Q2 '25	Q3 '25	Q4 '25	Q1 '26	Q2 '26	Q3 '26
Value	$6.03B	$6.03B	$6.03B	$6.03B	$7.40B	$7.40B	$7.40B	$7.40B	$8.61B	$9.41B	$10.31B	$11.85B	$12.31B	$13.57B	$15.12B
QoQ Change	—	+0.0%	+0.0%	+0.0%	+22.8%	+0.0%	+0.0%	+0.0%	+16.4%	+9.2%	+9.6%	+14.9%	+4.0%	+10.2%	+11.5%
YoY Change	—	—	—	—	+22.8%	+22.8%	+22.8%	+22.8%	+16.4%	+27.0%	+39.2%	+60.0%	+43.0%	+44.2%	+46.7%

Range$6.03B – $15.12B

CAGR+30.1%

Avg YoY Growth+33.4%

Median YoY Growth+27.0%

Current Streak14+ quarters growth

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Frequently Asked Questions

What is Microsoft's intelligent cloud — cost of goods sold?: Microsoft (MSFT) reported intelligent cloud — cost of goods sold of $15.12B in Q1 2026.
How has Microsoft's intelligent cloud — cost of goods sold changed year-over-year?: Microsoft's intelligent cloud — cost of goods sold increased by 46.7% year-over-year, from $10.31B to $15.12B.
What is the long-term trend for Microsoft's intelligent cloud — cost of goods sold?: Over 2 years (2023 to 2025), Microsoft's intelligent cloud — cost of goods sold has grown at a 29.1% compound annual growth rate (CAGR), from $24.11B to $40.17B.
What does intelligent cloud — cost of goods sold mean?: The direct costs, such as data center electricity and server hardware expenses, required to run Microsoft's cloud and server business.