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?

Revenue collected or billed in advance of performance — deferred revenue under ASC 606 terminology, representing future revenue obligations.

Microsoft MSFT Contract Liabilities

Contract Liabilities at other companies

Palo Alto Networks, Inc.PANW

$6.49B+11.6%

CrowdStrike Holdings, Inc.CRWD

$1.35B+32.0%

Intapp, Inc.INTA

$3.4M+65.0%

Zoom Video Communications, Inc.ZM

$13.81M-14.6%

Electronic ArtsEA

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SnowflakeSNOW

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Segments

By segment

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Productivity And Business Processes$39.9B+16.5%

Intelligent Cloud$10.89B+6.4%

More Personal Computing$2.88B-3.7%

Other financials

Income statement

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Revenue$82.9B+18.3%

Gross profit$56.1B+16.4%

Operating income$38.4B+20.0%

Net income$31.8B+23.1%

EPS (diluted)$4.27+23.4%

Balance sheet

See full

Cash & equivalents$32.1B+11.4%

Total debt$125.43B+19.4%

Total equity$414.37B+28.7%

Total assets$694.23B+23.4%

Cash flow

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Operating cash flow$46.7B+26.0%

CapEx$30.9B+84.4%

Free cash flow$15.8B-22.1%

Valuation

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Market cap$2.83T-25.4%

Enterprise value$2.93T-24.5%

P/E22.6×-14.7×

P/S8.9×-4.6×

Profitability

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Gross margin68.3%-0.8pp

Operating margin46.8%+1.6pp

Net margin39.3%+3.6pp

FCF margin22.9%-2.8pp

Returns & leverage

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Return on equity34%+0.4pp

Debt / equity0.3×0.0×

Current ratio1.3×-0.1×

Where this comes from

Reported directly by Microsoft in its filing.

Tagged under the XBRL concept us-gaap:ContractWithCustomerLiabilityNoncurrent.

The official record: Microsoft’s 10-Q, filed April 29, 2026, on SEC EDGAR. View the filing →

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Questions, answered.

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?: Revenue collected or billed in advance of performance — deferred revenue under ASC 606 terminology, representing future revenue obligations.