Contract Liabilities
Microsoft Contract Liabilities increased by 3.2% to $2.75B in Q1 2026 compared to the prior quarter. Year-over-year, this metric declined by 3.1%, from $2.84B to $2.75B. Over 4 years (FY 2021 to FY 2025), Contract Liabilities shows relatively stable performance with a 0.9% CAGR. This is a positive signal — higher values indicate stronger performance for this metric.
Analysis
How to read this metric
An increase is a positive sign of strong sales momentum and future revenue growth, while a decrease may suggest slowing bookings.
Detailed definition
Payments received from customers in advance of the company delivering products or performing services, often referred to...
Peer comparison
This is a primary metric for cloud peers like Salesforce or Amazon Web Services to track the health of their subscription pipelines.
contract_liabilitiesHistorical 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 | $2.62B | $2.55B | $2.77B | $2.77B | $2.87B | $2.55B | $2.64B | $2.70B | $2.91B | $2.76B | $2.97B | $2.95B | $2.60B | $2.66B | $2.54B | $2.84B | $2.71B | $2.55B | $2.67B | $2.75B |
| QoQ Change | — | -2.5% | +8.5% | +0.0% | +3.6% | -11.2% | +3.7% | +2.0% | +7.9% | -5.3% | +7.5% | -0.7% | -11.6% | +2.3% | -4.7% | +11.9% | -4.6% | -6.1% | +4.8% | +3.2% |
| YoY Change | — | — | — | — | +9.7% | -0.0% | -4.5% | -2.6% | +1.5% | +8.2% | +12.2% | +9.2% | -10.6% | -3.5% | -14.5% | -3.6% | +4.2% | -4.4% | +5.2% | -3.1% |
Business Segments
| Segment | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Productivity And Business Processes | $43.60B | $40.43B | $33.58B | $34.24B | $50.57B | $46.36B | $39.72B | $39.90B |
| Intelligent Cloud | $13.68B | $12.40B | $10.98B | $10.24B | $14.02B | $12.66B | $11.43B | $10.89B |
| More Personal Computing | $2.90B | $2.86B | $3.48B | $2.99B | $2.68B | $2.52B | $2.89B | $2.88B |
| Total | $2.60B | $2.66B | $2.54B | $2.84B | $2.71B | $2.55B | $2.67B | $2.75B |
Contract Liabilities at Other Companies
Frequently Asked Questions
- What is Microsoft's contract liabilities?
- Microsoft (MSFT) reported contract liabilities of $2.75B in Q1 2026.
- How has Microsoft's contract liabilities changed year-over-year?
- Microsoft's contract liabilities decreased by 3.1% year-over-year, from $2.84B to $2.75B.
- What is the long-term trend for Microsoft's contract liabilities?
- Over 4 years (2021 to 2025), Microsoft's contract liabilities has grown at a 0.9% compound annual growth rate (CAGR), from $2.62B to $2.71B.
- What does contract liabilities mean?
- Money customers have already paid for services or software that the company hasn't fully provided yet.