Search advertisingThin moat

Microsoft (MSFT) — moat facet

Bing grows faster after the partners are paid than before, and Copilot now sits inside the auction it might one day replace.

Search advertising is Microsoft's advertising business, and the more useful version of its revenue is the one after partners are paid. Revenue was $15.2 billion in fiscal 2026, 4.6% of the company1, up $1.3 billion, or 9%2. Excluding traffic acquisition costs it grew 12%, "driven by higher search volume and revenue per search, as well as benefit from third-party partnerships"3.

Search advertising revenue by quarter ($B)3.23Q1'253.56Q23.50Q33.59Q43.70Q1'263.81Q23.81Q33.86Q4Microsoft 10-Qs; Q4 = fiscal year (10-K) less nine months
Gross revenue grew 15% in September and 7-9% after; June was the largest quarter of the eight.

The 10-K now describes the line as Bing, Copilot, Microsoft News, Microsoft Edge and third-party affiliates4, and renamed it in fiscal 2026 from Search and news advertising5. Advertisers bid for placement against queries in an auction, and Microsoft pays traffic acquisition costs to the publishers and partners whose sites and devices carry Bing's ads6. Revenue is reported before those payments, which makes the gross figure partly a measure of how much Microsoft passes on, and the figure excluding those costs a better measure of what it keeps.

The line was $6.2 billion in fiscal 2017 and $7.6 billion in fiscal 20197, $8.5 billion in fiscal 2020, $9.3 billion in fiscal 2021 and $11.6 billion in fiscal 2022, when it grew 25% and 27% excluding acquisition costs on higher revenue per search and search volume8. In June 2022 Microsoft bought Xandr, an advertising technology platform9, which added to growth in fiscal 202310. From fiscal 2017 to fiscal 2026 the line compounded at about 10.4% a year on the figures as reported at the time11.

On the current basis revenue grew 1.5% in fiscal 2024, 12.8% in fiscal 2025 and 9.4% in fiscal 202612. The figure excluding acquisition costs tells a steadier story: 11% in fiscal 202313, 12% in fiscal 202414, 20% in fiscal 202515 and 12% in fiscal 202616. Fiscal 2024 is the year the two most disagree. Gross revenue barely moved while the net figure grew 12%, which can only mean Microsoft paid less in traffic acquisition costs and kept more of each dollar. The weak year for gross revenue was the good year for the business.

Fiscal 2026 slowed after a strong start. Excluding acquisition costs, growth was 16% in September, 10% in December, 12% in March and 10% in June17181920. Gross revenue grew 14.6% in September and between 7% and 9% in the three quarters after21. Every quarter credited higher search volume and third-party partnerships222324.

The line's name has moved with its contents. The fiscal 2019 filing called it Search advertising25; by fiscal 2022 it was Search and news advertising26; in fiscal 2026 it went back to Search advertising, now with Copilot in the list27. In dollars it grew from $3.2 billion in the September 2024 quarter to $3.9 billion in June 2026, its largest quarter in the eight28. Fiscal 2023, the year before the gap opened, grew 5% gross and 11% after acquisition costs, helped by Xandr29.

Bing's earnings, like Windows', disappear into More Personal Computing, which earned 26.6% of revenue in fiscal 202630; the segment's gross margin rose on growth in Search advertising and Windows OEM31. An auction on existing traffic costs little to run once the index is built, so search is probably among the more profitable parts of the segment, but the filings do not say so.

Microsoft's own description of the competition is broad: search engines, and a wide array of websites, social platforms and portals that provide content and online offerings32. That list is the honest one. The advertising dollars Bing competes for are spent across every page a person reads, not only on the results of a query, which is why a line with steady growth in search volume can still be a small one.

The contest with Google for the default search placement is argued on Google: Free Against Paid, on Every Front. The newer question is Copilot, which the 10-K now counts inside this line33. A chat answer that satisfies the question can replace the list of links and the ads between them, so Microsoft's own assistant may compete with its own auction. So far the line's growth has held up.

What decides this line's verdict is growth excluding traffic acquisition costs, 12% in fiscal 2026 and 10% in the June quarter. A year below high single digits while Copilot's use keeps rising would say the assistant is taking queries away from the auction rather than bringing new ones to it.

Moat trajectory: Holding steady

Growth excluding traffic acquisition costs slowed from 20% in fiscal 2025 to 12% in fiscal 2026 and 10% in June, still double-digit; Copilot inside the line is both a source of queries and a possible substitute for the ads.

The number that tests this moat
Reported
Search advertising revenue growth excluding TAC
+12% in FY2026; +10% in the June 2026 quarter

The figure after traffic acquisition costs is what Microsoft keeps. A year below high single digits while Copilot's use rises would say the assistant is taking queries from the auction.

Source: Microsoft Q4 FY2026 earnings release and Form 10-K FY2026 ↗
References
  1. ReportedRevenue was $15.2 billion in fiscal 2026, 4.6% of the company, up $1.3 billion, or 9%.
    Microsoft Form 10-K, FY2026 — Note: revenue by significant product and service offering, FY2024-FY2026 (Server products and cloud services $129,425M / $98,435M / $79,828M; Microsoft 365 Commercial $101,997M / $87,767M / $76,969M; XBOX $21,790M / $23,455M / $21,503M; LinkedIn $19,817M / $17,812M / $16,372M; Windows and Devices $17,084M / $17,314M / $17,026M; Search advertising $15,176M / $13,878M / $12,306M; Microsoft 365 Consumer $9,175M / $7,404M / $6,648M; Dynamics $9,006M / $7,827M / $6,831M; Enterprise and partner services $8,260M / $7,760M / $7,594M; Other $109M / $72M / $45M; total $331,839M); Microsoft Cloud revenue $214.4B, $168.9B and $137.7B, drawn from four of the lines; additions to property and equipment $115,948M — FY2024-FY2026 · publ. July 29, 2026 · source ↗
  2. ReportedRevenue was $15.2 billion in fiscal 2026, 4.6% of the company, up $1.3 billion, or 9%.
    Microsoft Form 10-K, FY2026 — Item 7 MD&A: segment results (Productivity and Business Processes revenue $139,996M, cost of revenue $25,017M, operating income $83,879M; Intelligent Cloud $137,791M, $57,876M, $56,972M; More Personal Computing $54,052M, $23,481M, $14,386M) and the drivers of each line: Server products and cloud services +$31.0B or 31% (Azure +41%, server products +1%); Microsoft 365 Commercial +$14.2B or 16% (cloud +17% on seats +6%, products +13%); Microsoft 365 Consumer +$1.8B or 24% (cloud +28% on subscribers +7%); LinkedIn +$2.0B or 11%; Dynamics +$1.2B or 15% (Dynamics 365 +18%); Enterprise and partner services +$500M or 6%; Windows and Devices -$230M or 1% (Windows OEM +5%); XBOX -$1.7B or 7% (content and services -5%, hardware -29%); Search advertising +$1.3B or 9% (ex-TAC +12%); the Microsoft 365 Consumer subscriber metric removed — FY2026 · publ. July 29, 2026 · source ↗
  3. ReportedExcluding traffic acquisition costs it grew 12%, "driven by higher search volume and revenue per search, as well as benefit from third-party partnerships".
    Microsoft Form 10-K, FY2026 — Item 7 MD&A: segment results (Productivity and Business Processes revenue $139,996M, cost of revenue $25,017M, operating income $83,879M; Intelligent Cloud $137,791M, $57,876M, $56,972M; More Personal Computing $54,052M, $23,481M, $14,386M) and the drivers of each line: Server products and cloud services +$31.0B or 31% (Azure +41%, server products +1%); Microsoft 365 Commercial +$14.2B or 16% (cloud +17% on seats +6%, products +13%); Microsoft 365 Consumer +$1.8B or 24% (cloud +28% on subscribers +7%); LinkedIn +$2.0B or 11%; Dynamics +$1.2B or 15% (Dynamics 365 +18%); Enterprise and partner services +$500M or 6%; Windows and Devices -$230M or 1% (Windows OEM +5%); XBOX -$1.7B or 7% (content and services -5%, hardware -29%); Search advertising +$1.3B or 9% (ex-TAC +12%); the Microsoft 365 Consumer subscriber metric removed — FY2026 · publ. July 29, 2026 · source ↗
  4. ReportedThe 10-K now describes the line as Bing, Copilot, Microsoft News, Microsoft Edge and third-party affiliates, and renamed it in fiscal 2026 from Search and news advertising.
    Microsoft Form 10-K, FY2026 — Item 1 Business: what each segment and line comprises, what drives each line's revenue (Azure consumption, per-user Microsoft 365 and Dynamics, Windows OEM licensing factors, XBOX content and subscriptions, LinkedIn's four products), the fiscal 2026 renaming of Gaming to XBOX and of Search and news advertising to Search advertising, and each line's competition — FY2026 · publ. July 29, 2026 · source ↗
  5. ReportedThe 10-K now describes the line as Bing, Copilot, Microsoft News, Microsoft Edge and third-party affiliates, and renamed it in fiscal 2026 from Search and news advertising.
    Microsoft Form 10-K, FY2026 — Item 1 Business: what each segment and line comprises, what drives each line's revenue (Azure consumption, per-user Microsoft 365 and Dynamics, Windows OEM licensing factors, XBOX content and subscriptions, LinkedIn's four products), the fiscal 2026 renaming of Gaming to XBOX and of Search and news advertising to Search advertising, and each line's competition — FY2026 · publ. July 29, 2026 · source ↗
  6. ReportedAdvertisers bid for placement against queries in an auction, and Microsoft pays traffic acquisition costs to the publishers and partners whose sites and devices carry Bing's ads.
    Microsoft Form 10-K, FY2026 — Item 7 MD&A: segment results (Productivity and Business Processes revenue $139,996M, cost of revenue $25,017M, operating income $83,879M; Intelligent Cloud $137,791M, $57,876M, $56,972M; More Personal Computing $54,052M, $23,481M, $14,386M) and the drivers of each line: Server products and cloud services +$31.0B or 31% (Azure +41%, server products +1%); Microsoft 365 Commercial +$14.2B or 16% (cloud +17% on seats +6%, products +13%); Microsoft 365 Consumer +$1.8B or 24% (cloud +28% on subscribers +7%); LinkedIn +$2.0B or 11%; Dynamics +$1.2B or 15% (Dynamics 365 +18%); Enterprise and partner services +$500M or 6%; Windows and Devices -$230M or 1% (Windows OEM +5%); XBOX -$1.7B or 7% (content and services -5%, hardware -29%); Search advertising +$1.3B or 9% (ex-TAC +12%); the Microsoft 365 Consumer subscriber metric removed — FY2026 · publ. July 29, 2026 · source ↗
  7. ReportedThe line was $6.2 billion in fiscal 2017 and $7.6 billion in fiscal 2019, $8.5 billion in fiscal 2020, $9.3 billion in fiscal 2021 and $11.6 billion in fiscal 2022, when it grew 25% and 27% excluding acquisition costs on higher revenue per search and search volume.
    Microsoft Form 10-K, FY2019 — revenue by offering FY2017-FY2019 (Server products and cloud services $21,649M / $26,129M / $32,622M; Office products and cloud services $25,573M / $28,316M / $31,769M; Windows $18,593M / $19,518M / $20,395M; Gaming $9,051M / $10,353M / $11,386M; Search advertising $6,219M / $7,012M / $7,628M; LinkedIn $2,271M / $5,259M / $6,754M; Enterprise Services $5,542M / $5,846M / $6,124M); LinkedIn acquired 8 December 2016 for $27.0B; GitHub acquired 25 October 2018 for $7.5B — FY2017-FY2019 · publ. August 1, 2019 · source ↗
  8. ReportedThe line was $6.2 billion in fiscal 2017 and $7.6 billion in fiscal 2019, $8.5 billion in fiscal 2020, $9.3 billion in fiscal 2021 and $11.6 billion in fiscal 2022, when it grew 25% and 27% excluding acquisition costs on higher revenue per search and search volume.
    Microsoft Form 10-K, FY2022 — revenue by offering FY2020-FY2022 (Server products and cloud services $41,379M / $52,589M / $67,321M; Office products and cloud services $44,862M in FY2022; Windows $24,761M; Gaming $11,575M / $15,370M / $16,230M; LinkedIn $8,077M / $10,289M / $13,816M; Search and news advertising $8,524M / $9,267M / $11,591M; Enterprise Services $6,409M / $6,943M / $7,407M); FY2022 drivers (Azure +45%, LinkedIn +34%, Office Consumer +11% with subscribers 59.7 million, Dynamics +25% on Dynamics 365 +39%, Windows OEM +11%, search +25% and ex-TAC +27%, Surface +3%); Nuance acquired 4 March 2022 for $18.8B; ZeniMax $8.1B; Xandr acquired 6 June 2022; LinkedIn over 850 million members — FY2020-FY2022 · publ. July 28, 2022 · source ↗
  9. ReportedIn June 2022 Microsoft bought Xandr, an advertising technology platform, which added to growth in fiscal 2023.
    Microsoft Form 10-K, FY2022 — revenue by offering FY2020-FY2022 (Server products and cloud services $41,379M / $52,589M / $67,321M; Office products and cloud services $44,862M in FY2022; Windows $24,761M; Gaming $11,575M / $15,370M / $16,230M; LinkedIn $8,077M / $10,289M / $13,816M; Search and news advertising $8,524M / $9,267M / $11,591M; Enterprise Services $6,409M / $6,943M / $7,407M); FY2022 drivers (Azure +45%, LinkedIn +34%, Office Consumer +11% with subscribers 59.7 million, Dynamics +25% on Dynamics 365 +39%, Windows OEM +11%, search +25% and ex-TAC +27%, Surface +3%); Nuance acquired 4 March 2022 for $18.8B; ZeniMax $8.1B; Xandr acquired 6 June 2022; LinkedIn over 850 million members — FY2020-FY2022 · publ. July 28, 2022 · source ↗
  10. ReportedIn June 2022 Microsoft bought Xandr, an advertising technology platform, which added to growth in fiscal 2023.
    Microsoft Form 10-K, FY2023 — FY2023 drivers (Azure +29%, server products -1%, Office 365 Commercial +13% on seats +11%, Office Commercial products -21%, Office Consumer +2% with subscribers 67.0 million, LinkedIn +10% on Talent Solutions and over 950 million members, Dynamics +16% on Dynamics 365 +24%, Windows OEM -25% and Devices -24% on elevated channel inventory, Gaming -5%, search +5% and ex-TAC +11% helped by Xandr, Enterprise Services +4% with Industry Solutions formerly Microsoft Consulting Services) — FY2023 · publ. July 27, 2023 · source ↗
  11. Moat Explorer calcFrom fiscal 2017 to fiscal 2026 the line compounded at about 10.4% a year on the figures as reported at the time.
    Moat Explorer calculation from Microsoft Forms 10-K (FY2017-FY2026) and 10-Q (FY2025-FY2026): growth = year / prior year - 1 on the revenue-by-offering tables; compound rates = (end / start)^(1/years) - 1; quarterly revenue for the fourth quarter = fiscal-year revenue less the nine-month figure in the third-quarter 10-Q; segment margins = segment operating income / segment revenue and gross margin = (segment revenue - cost of revenue) / segment revenue (Intelligent Cloud $57,853M / $87,464M = 66.1% in FY2024, $66,094M / $106,265M = 62.2% in FY2025, $79,915M / $137,791M = 58.0% in FY2026); share of FY2026 growth = line increase / total increase of $50,115M (Server products and cloud services $30,990M plus Microsoft 365 Commercial $14,230M = 90.2%); shares of revenue = line / total — FY2017-FY2026 · publ. 2026 · source ↗
    Method: Moat Explorer calculation from the revenue-by-offering tables and segment results in Microsoft's Forms 10-K and 10-Q; see the source line for the method.
  12. Moat Explorer calcOn the current basis revenue grew 1.5% in fiscal 2024, 12.8% in fiscal 2025 and 9.4% in fiscal 2026.
    Moat Explorer calculation from Microsoft Forms 10-K (FY2017-FY2026) and 10-Q (FY2025-FY2026): growth = year / prior year - 1 on the revenue-by-offering tables; compound rates = (end / start)^(1/years) - 1; quarterly revenue for the fourth quarter = fiscal-year revenue less the nine-month figure in the third-quarter 10-Q; segment margins = segment operating income / segment revenue and gross margin = (segment revenue - cost of revenue) / segment revenue (Intelligent Cloud $57,853M / $87,464M = 66.1% in FY2024, $66,094M / $106,265M = 62.2% in FY2025, $79,915M / $137,791M = 58.0% in FY2026); share of FY2026 growth = line increase / total increase of $50,115M (Server products and cloud services $30,990M plus Microsoft 365 Commercial $14,230M = 90.2%); shares of revenue = line / total — FY2017-FY2026 · publ. 2026 · source ↗
    Method: Moat Explorer calculation from the revenue-by-offering tables and segment results in Microsoft's Forms 10-K and 10-Q; see the source line for the method.
  13. ReportedThe figure excluding acquisition costs tells a steadier story: 11% in fiscal 2023, 12% in fiscal 2024, 20% in fiscal 2025 and 12% in fiscal 2026.
    Microsoft Form 10-K, FY2023 — FY2023 drivers (Azure +29%, server products -1%, Office 365 Commercial +13% on seats +11%, Office Commercial products -21%, Office Consumer +2% with subscribers 67.0 million, LinkedIn +10% on Talent Solutions and over 950 million members, Dynamics +16% on Dynamics 365 +24%, Windows OEM -25% and Devices -24% on elevated channel inventory, Gaming -5%, search +5% and ex-TAC +11% helped by Xandr, Enterprise Services +4% with Industry Solutions formerly Microsoft Consulting Services) — FY2023 · publ. July 27, 2023 · source ↗
  14. ReportedThe figure excluding acquisition costs tells a steadier story: 11% in fiscal 2023, 12% in fiscal 2024, 20% in fiscal 2025 and 12% in fiscal 2026.
    Microsoft Form 10-K, FY2024 — revenue by offering FY2022-FY2024 on the pre-recast basis (Server products and cloud services $79,970M in FY2023; Office products and cloud services $54,875M in FY2024; Dynamics $4,687M in FY2022 and $5,437M in FY2023); FY2024 drivers (Azure +30%, seats +7%, Office 365 Commercial +16%, Office Commercial products -16%, Office Consumer +4% with subscribers 82.5 million, LinkedIn +9% across all four lines of business, Dynamics +19%, Windows OEM +7%, Devices -15%, Gaming +39% with 44 points of net impact from Activision Blizzard, Xbox hardware -13%, search ex-TAC +12%, Enterprise and partner services -4%); Activision Blizzard acquired 13 October 2023 for $75.4B — FY2022-FY2024 · publ. July 30, 2024 · source ↗
  15. ReportedThe figure excluding acquisition costs tells a steadier story: 11% in fiscal 2023, 12% in fiscal 2024, 20% in fiscal 2025 and 12% in fiscal 2026.
    Microsoft Form 10-K, FY2025 — revenue by product and service offering on the recast basis, FY2023-FY2025 (Server products and cloud services $65,007M in FY2023; Windows and Devices $17,147M; Dynamics $5,796M; Enterprise and partner services $7,900M); the recast 'bringing the commercial components of Microsoft 365 together'; segment results FY2024-FY2025 (Intelligent Cloud revenue $87,464M and $106,265M, cost of revenue $29,611M and $40,171M, operating income $37,813M and $44,589M); FY2025 drivers (Azure +34%, server products -3%, Microsoft 365 Commercial cloud +15% on seats +6%, Office 2024, Microsoft 365 Consumer subscribers 89.0 million after the January 2025 price increase, Dynamics 365 +19%, Gaming +9% with Xbox content and services +16% and hardware -25%, search ex-TAC +20%); More Personal Computing goodwill acquired $51,235M — FY2023-FY2025 · publ. July 30, 2025 · source ↗
  16. ReportedThe figure excluding acquisition costs tells a steadier story: 11% in fiscal 2023, 12% in fiscal 2024, 20% in fiscal 2025 and 12% in fiscal 2026.
    Microsoft Form 10-K, FY2026 — Item 7 MD&A: segment results (Productivity and Business Processes revenue $139,996M, cost of revenue $25,017M, operating income $83,879M; Intelligent Cloud $137,791M, $57,876M, $56,972M; More Personal Computing $54,052M, $23,481M, $14,386M) and the drivers of each line: Server products and cloud services +$31.0B or 31% (Azure +41%, server products +1%); Microsoft 365 Commercial +$14.2B or 16% (cloud +17% on seats +6%, products +13%); Microsoft 365 Consumer +$1.8B or 24% (cloud +28% on subscribers +7%); LinkedIn +$2.0B or 11%; Dynamics +$1.2B or 15% (Dynamics 365 +18%); Enterprise and partner services +$500M or 6%; Windows and Devices -$230M or 1% (Windows OEM +5%); XBOX -$1.7B or 7% (content and services -5%, hardware -29%); Search advertising +$1.3B or 9% (ex-TAC +12%); the Microsoft 365 Consumer subscriber metric removed — FY2026 · publ. July 29, 2026 · source ↗
  17. ReportedExcluding acquisition costs, growth was 16% in September, 10% in December, 12% in March and 10% in June.
    Microsoft Form 10-Q, quarter ended 30 September 2025 — revenue by offering for the quarter and a year earlier, and the drivers (Azure +40%, Windows Server 2025, Windows OEM +18% ahead of Windows 10 end of support, Xbox hardware -29%, LinkedIn +10% on Marketing Solutions, search ex-TAC +16%, Microsoft 365 Commercial products +17% on Office 2024, Industry Solutions decline) — Q1 FY2026 · publ. October 29, 2025 · source ↗
  18. ReportedExcluding acquisition costs, growth was 16% in September, 10% in December, 12% in March and 10% in June.
    Microsoft Form 10-Q, quarter ended 31 December 2025 — revenue by offering for the quarter, six months and a year earlier, and the drivers (Azure +39%, SQL Server 2025, Windows OEM +5% with continued benefit from Windows 10 end of support, Xbox hardware -32%, LinkedIn +11% on Marketing Solutions, search ex-TAC +10%, impairment charges in Gaming) — Q2 FY2026 · publ. January 28, 2026 · source ↗
  19. ReportedExcluding acquisition costs, growth was 16% in September, 10% in December, 12% in March and 10% in June.
    Microsoft Form 10-Q, quarter ended 31 March 2026 — revenue by offering for the quarter, nine months and a year earlier, and the drivers (Azure +40%, Microsoft 365 Commercial cloud +19% and products +1%, Microsoft 365 Consumer cloud +33%, LinkedIn +12% across all lines, Dynamics 365 +22%, OEMs building inventory on rising memory prices, Xbox hardware -33%, search ex-TAC +12%) — Q3 FY2026 · publ. April 29, 2026 · source ↗
  20. ReportedExcluding acquisition costs, growth was 16% in September, 10% in December, 12% in March and 10% in June.
    Microsoft, Q4 FY2026 earnings release (Form 8-K, Exhibit 99.1) — quarter ended June 30, 2026: revenue $90,007M (+18%); operating income $40,603M (+18%); net income $35,766M GAAP and $35,286M non-GAAP; diluted EPS $4.81 and $4.74; Microsoft Cloud revenue $59.3B (+27%); commercial remaining performance obligation +84% to $678B; Azure and other cloud services +43%; Productivity and Business Processes $37,847M (+14%); Intelligent Cloud $39,306M (+32%); More Personal Computing $12,854M (-4%); Windows OEM and Devices -7%; XBOX content and services -10%; a $3.2B gain on the investment in Anthropic and lower-than-expected Voluntary Retirement Program expenses contributing $0.27 of EPS against guidance; Azure revenue surpassed $100 billion for the first time and Microsoft 365 Copilot reached over 30 million paid seats; $10.2B returned to shareholders — Q4 FY2026 (quarter ended June 30, 2026) · publ. July 29, 2026 · source ↗
  21. Moat Explorer calcGross revenue grew 14.6% in September and between 7% and 9% in the three quarters after.
    Moat Explorer calculation from Microsoft Forms 10-K (FY2017-FY2026) and 10-Q (FY2025-FY2026): growth = year / prior year - 1 on the revenue-by-offering tables; compound rates = (end / start)^(1/years) - 1; quarterly revenue for the fourth quarter = fiscal-year revenue less the nine-month figure in the third-quarter 10-Q; segment margins = segment operating income / segment revenue and gross margin = (segment revenue - cost of revenue) / segment revenue (Intelligent Cloud $57,853M / $87,464M = 66.1% in FY2024, $66,094M / $106,265M = 62.2% in FY2025, $79,915M / $137,791M = 58.0% in FY2026); share of FY2026 growth = line increase / total increase of $50,115M (Server products and cloud services $30,990M plus Microsoft 365 Commercial $14,230M = 90.2%); shares of revenue = line / total — FY2017-FY2026 · publ. 2026 · source ↗
    Method: Moat Explorer calculation from the revenue-by-offering tables and segment results in Microsoft's Forms 10-K and 10-Q; see the source line for the method.
  22. ReportedEvery quarter credited higher search volume and third-party partnerships.
    Microsoft Form 10-Q, quarter ended 30 September 2025 — revenue by offering for the quarter and a year earlier, and the drivers (Azure +40%, Windows Server 2025, Windows OEM +18% ahead of Windows 10 end of support, Xbox hardware -29%, LinkedIn +10% on Marketing Solutions, search ex-TAC +16%, Microsoft 365 Commercial products +17% on Office 2024, Industry Solutions decline) — Q1 FY2026 · publ. October 29, 2025 · source ↗
  23. ReportedEvery quarter credited higher search volume and third-party partnerships.
    Microsoft Form 10-Q, quarter ended 31 December 2025 — revenue by offering for the quarter, six months and a year earlier, and the drivers (Azure +39%, SQL Server 2025, Windows OEM +5% with continued benefit from Windows 10 end of support, Xbox hardware -32%, LinkedIn +11% on Marketing Solutions, search ex-TAC +10%, impairment charges in Gaming) — Q2 FY2026 · publ. January 28, 2026 · source ↗
  24. ReportedEvery quarter credited higher search volume and third-party partnerships.
    Microsoft Form 10-Q, quarter ended 31 March 2026 — revenue by offering for the quarter, nine months and a year earlier, and the drivers (Azure +40%, Microsoft 365 Commercial cloud +19% and products +1%, Microsoft 365 Consumer cloud +33%, LinkedIn +12% across all lines, Dynamics 365 +22%, OEMs building inventory on rising memory prices, Xbox hardware -33%, search ex-TAC +12%) — Q3 FY2026 · publ. April 29, 2026 · source ↗
  25. ReportedThe fiscal 2019 filing called it Search advertising; by fiscal 2022 it was Search and news advertising; in fiscal 2026 it went back to Search advertising, now with Copilot in the list.
    Microsoft Form 10-K, FY2019 — revenue by offering FY2017-FY2019 (Server products and cloud services $21,649M / $26,129M / $32,622M; Office products and cloud services $25,573M / $28,316M / $31,769M; Windows $18,593M / $19,518M / $20,395M; Gaming $9,051M / $10,353M / $11,386M; Search advertising $6,219M / $7,012M / $7,628M; LinkedIn $2,271M / $5,259M / $6,754M; Enterprise Services $5,542M / $5,846M / $6,124M); LinkedIn acquired 8 December 2016 for $27.0B; GitHub acquired 25 October 2018 for $7.5B — FY2017-FY2019 · publ. August 1, 2019 · source ↗
  26. ReportedThe fiscal 2019 filing called it Search advertising; by fiscal 2022 it was Search and news advertising; in fiscal 2026 it went back to Search advertising, now with Copilot in the list.
    Microsoft Form 10-K, FY2022 — revenue by offering FY2020-FY2022 (Server products and cloud services $41,379M / $52,589M / $67,321M; Office products and cloud services $44,862M in FY2022; Windows $24,761M; Gaming $11,575M / $15,370M / $16,230M; LinkedIn $8,077M / $10,289M / $13,816M; Search and news advertising $8,524M / $9,267M / $11,591M; Enterprise Services $6,409M / $6,943M / $7,407M); FY2022 drivers (Azure +45%, LinkedIn +34%, Office Consumer +11% with subscribers 59.7 million, Dynamics +25% on Dynamics 365 +39%, Windows OEM +11%, search +25% and ex-TAC +27%, Surface +3%); Nuance acquired 4 March 2022 for $18.8B; ZeniMax $8.1B; Xandr acquired 6 June 2022; LinkedIn over 850 million members — FY2020-FY2022 · publ. July 28, 2022 · source ↗
  27. ReportedThe fiscal 2019 filing called it Search advertising; by fiscal 2022 it was Search and news advertising; in fiscal 2026 it went back to Search advertising, now with Copilot in the list.
    Microsoft Form 10-K, FY2026 — Item 1 Business: what each segment and line comprises, what drives each line's revenue (Azure consumption, per-user Microsoft 365 and Dynamics, Windows OEM licensing factors, XBOX content and subscriptions, LinkedIn's four products), the fiscal 2026 renaming of Gaming to XBOX and of Search and news advertising to Search advertising, and each line's competition — FY2026 · publ. July 29, 2026 · source ↗
  28. Moat Explorer calcIn dollars it grew from $3.2 billion in the September 2024 quarter to $3.9 billion in June 2026, its largest quarter in the eight.
    Moat Explorer calculation from Microsoft Forms 10-K (FY2017-FY2026) and 10-Q (FY2025-FY2026): growth = year / prior year - 1 on the revenue-by-offering tables; compound rates = (end / start)^(1/years) - 1; quarterly revenue for the fourth quarter = fiscal-year revenue less the nine-month figure in the third-quarter 10-Q; segment margins = segment operating income / segment revenue and gross margin = (segment revenue - cost of revenue) / segment revenue (Intelligent Cloud $57,853M / $87,464M = 66.1% in FY2024, $66,094M / $106,265M = 62.2% in FY2025, $79,915M / $137,791M = 58.0% in FY2026); share of FY2026 growth = line increase / total increase of $50,115M (Server products and cloud services $30,990M plus Microsoft 365 Commercial $14,230M = 90.2%); shares of revenue = line / total — FY2017-FY2026 · publ. 2026 · source ↗
    Method: Moat Explorer calculation from the revenue-by-offering tables and segment results in Microsoft's Forms 10-K and 10-Q; see the source line for the method.
  29. ReportedFiscal 2023, the year before the gap opened, grew 5% gross and 11% after acquisition costs, helped by Xandr.
    Microsoft Form 10-K, FY2023 — FY2023 drivers (Azure +29%, server products -1%, Office 365 Commercial +13% on seats +11%, Office Commercial products -21%, Office Consumer +2% with subscribers 67.0 million, LinkedIn +10% on Talent Solutions and over 950 million members, Dynamics +16% on Dynamics 365 +24%, Windows OEM -25% and Devices -24% on elevated channel inventory, Gaming -5%, search +5% and ex-TAC +11% helped by Xandr, Enterprise Services +4% with Industry Solutions formerly Microsoft Consulting Services) — FY2023 · publ. July 27, 2023 · source ↗
  30. Moat Explorer calcBing's earnings, like Windows', disappear into More Personal Computing, which earned 26.6% of revenue in fiscal 2026; the segment's gross margin rose on growth in Search advertising and Windows OEM.
    Moat Explorer calculation from Microsoft Forms 10-K (FY2017-FY2026) and 10-Q (FY2025-FY2026): growth = year / prior year - 1 on the revenue-by-offering tables; compound rates = (end / start)^(1/years) - 1; quarterly revenue for the fourth quarter = fiscal-year revenue less the nine-month figure in the third-quarter 10-Q; segment margins = segment operating income / segment revenue and gross margin = (segment revenue - cost of revenue) / segment revenue (Intelligent Cloud $57,853M / $87,464M = 66.1% in FY2024, $66,094M / $106,265M = 62.2% in FY2025, $79,915M / $137,791M = 58.0% in FY2026); share of FY2026 growth = line increase / total increase of $50,115M (Server products and cloud services $30,990M plus Microsoft 365 Commercial $14,230M = 90.2%); shares of revenue = line / total — FY2017-FY2026 · publ. 2026 · source ↗
    Method: Moat Explorer calculation from the revenue-by-offering tables and segment results in Microsoft's Forms 10-K and 10-Q; see the source line for the method.
  31. ReportedBing's earnings, like Windows', disappear into More Personal Computing, which earned 26.6% of revenue in fiscal 2026; the segment's gross margin rose on growth in Search advertising and Windows OEM.
    Microsoft Form 10-K, FY2026 — Item 7 MD&A: segment results (Productivity and Business Processes revenue $139,996M, cost of revenue $25,017M, operating income $83,879M; Intelligent Cloud $137,791M, $57,876M, $56,972M; More Personal Computing $54,052M, $23,481M, $14,386M) and the drivers of each line: Server products and cloud services +$31.0B or 31% (Azure +41%, server products +1%); Microsoft 365 Commercial +$14.2B or 16% (cloud +17% on seats +6%, products +13%); Microsoft 365 Consumer +$1.8B or 24% (cloud +28% on subscribers +7%); LinkedIn +$2.0B or 11%; Dynamics +$1.2B or 15% (Dynamics 365 +18%); Enterprise and partner services +$500M or 6%; Windows and Devices -$230M or 1% (Windows OEM +5%); XBOX -$1.7B or 7% (content and services -5%, hardware -29%); Search advertising +$1.3B or 9% (ex-TAC +12%); the Microsoft 365 Consumer subscriber metric removed — FY2026 · publ. July 29, 2026 · source ↗
  32. ReportedMicrosoft's own description of the competition is broad: search engines, and a wide array of websites, social platforms and portals that provide content and online offerings.
    Microsoft Form 10-K, FY2026 — Item 1 Business: what each segment and line comprises, what drives each line's revenue (Azure consumption, per-user Microsoft 365 and Dynamics, Windows OEM licensing factors, XBOX content and subscriptions, LinkedIn's four products), the fiscal 2026 renaming of Gaming to XBOX and of Search and news advertising to Search advertising, and each line's competition — FY2026 · publ. July 29, 2026 · source ↗
  33. ReportedThe newer question is Copilot, which the 10-K now counts inside this line.
    Microsoft Form 10-K, FY2026 — Item 1 Business: what each segment and line comprises, what drives each line's revenue (Azure consumption, per-user Microsoft 365 and Dynamics, Windows OEM licensing factors, XBOX content and subscriptions, LinkedIn's four products), the fiscal 2026 renaming of Gaming to XBOX and of Search and news advertising to Search advertising, and each line's competition — FY2026 · publ. July 29, 2026 · source ↗
Sources
Generated September 22, 2026