Service Other — Cost of Goods Sold
Microsoft Service Other — Cost of Goods Sold increased by 7.2% to $24.10B in Q1 2026 compared to the prior quarter. Year-over-year, this metric grew by 27.6%, from $18.88B to $24.10B. Over 4 years (FY 2021 to FY 2025), Service Other — Cost of Goods Sold shows an upward trend with a 21.6% CAGR. This increase may warrant attention — for this metric, lower values are generally preferred.
Analysis
How to read this metric
An increase in this metric relative to revenue may signal rising infrastructure costs or heavy investment in AI capacity, while a decrease suggests improved operational efficiency and better utilization of data center assets.
Detailed definition
This metric represents the direct costs associated with generating revenue from Microsoft's service-based offerings and...
Peer comparison
Similar to the cost of revenue for Amazon Web Services (AWS) or Google Cloud's cost of services.
msft_segment_service_other_cost_of_goods_and_services_soldHistorical Data
| Q4 '21 | Q1 '22 | Q2 '22 | Q3 '22 | Q4 '22 | 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 | $9.70B | $9.85B | $10.63B | $11.03B | $12.07B | $11.15B | $11.80B | $12.19B | $12.92B | $12.77B | $13.66B | $14.17B | $18.25B | $16.81B | $17.94B | $18.88B | $20.70B | $21.12B | $22.47B | $24.10B |
| QoQ Change | — | +1.5% | +7.9% | +3.8% | +9.4% | -7.6% | +5.8% | +3.3% | +6.0% | -1.2% | +7.0% | +3.7% | +28.8% | -7.9% | +6.8% | +5.2% | +9.6% | +2.0% | +6.4% | +7.2% |
| YoY Change | — | — | — | — | +24.4% | +13.2% | +11.0% | +10.5% | +7.1% | +14.5% | +15.8% | +16.2% | +41.2% | +31.6% | +31.4% | +33.3% | +13.4% | +25.7% | +25.2% | +27.6% |
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Frequently Asked Questions
- What is Microsoft's service other — cost of goods sold?
- Microsoft (MSFT) reported service other — cost of goods sold of $24.10B in Q1 2026.
- How has Microsoft's service other — cost of goods sold changed year-over-year?
- Microsoft's service other — cost of goods sold increased by 27.6% year-over-year, from $18.88B to $24.10B.
- What is the long-term trend for Microsoft's service other — cost of goods sold?
- Over 4 years (2021 to 2025), Microsoft's service other — cost of goods sold has grown at a 21.6% compound annual growth rate (CAGR), from $34.01B to $74.33B.
- What does service other — cost of goods sold mean?
- The total cost of running the data centers and providing the digital services that power Microsoft's cloud, search, and professional networking platforms.