Cost of Revenue
Total Cost of Revenue
Microsoft Total Cost of Revenue increased by 3.3% to $26.83B in Q1 2026 compared to the prior quarter. Year-over-year, this metric grew by 22.4%, from $21.92B to $26.83B. Over 4 years (FY 2021 to FY 2025), Total Cost of Revenue shows an upward trend with a 13.9% CAGR. This is a positive signal — lower values indicate better performance for this metric.
Analysis
StatementIncome Statement
SectionCost of Revenue
CategoryProfitability
SignalLower is better
VolatilityStable
First reportedQ1 2014
Last reportedQ3 2026Apr 29, 2026
How to read this metric
An increase relative to revenue suggests rising production costs or margin compression, while a decrease suggests improved operational efficiency.
Detailed definition
Total cost of revenue includes the direct costs attributable to the production of goods or the delivery of services sold...
Peer comparison
Varies by industry; for medical device manufacturers, this includes significant manufacturing and supply chain costs.
Metric ID:
total_cost_of_revenueHistorical Data
20 periods
| 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 | $13.99B | $13.65B | $16.96B | $15.62B | $16.43B | $15.45B | $17.49B | $16.13B | $16.80B | $16.30B | $19.62B | $18.51B | $19.68B | $20.10B | $21.80B | $21.92B | $24.01B | $24.04B | $25.98B | $26.83B |
| QoQ Change | — | -2.5% | +24.3% | -7.9% | +5.2% | -5.9% | +13.2% | -7.8% | +4.1% | -2.9% | +20.4% | -5.7% | +6.4% | +2.1% | +8.5% | +0.6% | +9.6% | +0.1% | +8.0% | +3.3% |
| YoY Change | — | — | — | — | +17.4% | +13.2% | +3.1% | +3.3% | +2.2% | +5.5% | +12.2% | +14.7% | +17.2% | +23.3% | +11.1% | +18.4% | +22.0% | +19.6% | +19.2% | +22.4% |
Range$13.65B – $26.83B
CAGR+14.7%
Avg YoY Growth+14.1%
Median YoY Growth+16.0%
Current Streak8 quarters growth
Product Breakdown
| Segment | Q4 '23 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 |
|---|---|---|---|---|---|
| Service Other | $12.92B | $18.25B | $16.81B | $17.94B | $18.88B |
| Product | $3.87B | $1.44B | $3.29B | $3.86B | $3.04B |
| Total | $16.80B | $19.68B | $20.10B | $21.80B | $21.92B |
Business Segments
| Segment | Q3 '26 |
|---|---|
| Intelligent Cloud | $15.12B |
| Productivity And Business Processes | $6.20B |
| More Personal Computing | $5.51B |
| Total | $26.83B |
Total Cost of Revenue at Other Companies
Frequently Asked Questions
- What is Microsoft's total cost of revenue?
- Microsoft (MSFT) reported total cost of revenue of $26.83B in Q1 2026.
- How has Microsoft's total cost of revenue changed year-over-year?
- Microsoft's total cost of revenue increased by 22.4% year-over-year, from $21.92B to $26.83B.
- What is the long-term trend for Microsoft's total cost of revenue?
- Over 4 years (2021 to 2025), Microsoft's total cost of revenue has grown at a 13.9% compound annual growth rate (CAGR), from $52.23B to $87.83B.
- What does total cost of revenue mean?
- The direct costs incurred to produce the goods or services that a company sold during a specific period.