Windows and DevicesNarrow moat

Microsoft (MSFT) — moat facet

The business that built Microsoft has not grown in four years, and fiscal 2026 borrowed its best quarters from the Windows 10 deadline.

Windows and Devices is what remains of the business that built Microsoft, and it has not grown for four years. Revenue was $17.1 billion in fiscal 2026, 5.1% of the company12, down $230 million, or 1%3. On the current basis it was $17,147 million in fiscal 2023, $17,026 million in fiscal 2024 and $17,314 million in fiscal 20254, a compound change of about minus 0.1% a year5.

Windows and Devices revenue by quarter ($B)4.33Q1'254.51Q24.14Q34.33Q44.55Q1'264.48Q24.04Q34.01Q4Microsoft 10-Qs; Q4 = fiscal year (10-K) less nine months
The Windows 10 deadline lifted September; by June the line was 7% below a year earlier.

The line has two parts: Windows OEM licensing, meaning Windows Pro and non-Pro licences sold through the manufacturer channel, and Devices, meaning Surface and PC accessories6. Windows sold to companies under Microsoft 365 is not here; since the fiscal 2025 recast it sits in Microsoft 365 Commercial7. That is why this line looks so small beside the old Windows figures, and it is why the fastest-growing part of Windows no longer shows up in it.

A Windows OEM licence is paid once, by the manufacturer, when a PC is built. The 10-K lists what moves the revenue: the number of devices, their mix by form factor, demand in developed and growth markets, the AI PC category, the share of devices that ship with Windows, the mix of consumer, small business and large enterprise buyers, inventory in the channel, pricing, supply constraints and piracy8. Almost none of that is under Microsoft's control.

On the old definition, Windows revenue was $18.6 billion in fiscal 2017 and $20.4 billion in fiscal 20199, and $24.8 billion in fiscal 2022, when Windows OEM grew 11% on the commercial PC market10. Then came the worst year in the series. In fiscal 2023 Windows OEM fell 25% and Devices 24% as "elevated channel inventory levels continued to drive additional weakness beyond declining PC demand"11. Windows OEM recovered 7% in fiscal 2024 while Devices fell 15%12; Windows OEM and Devices together grew 3% in fiscal 202513.

Fiscal 2026 looked better than it was. Windows OEM grew 5% for the year, with inventory levels that remained elevated14. The September quarter's 18% OEM growth came from "demand ahead of Windows 10 end of support"15, and the December quarter still had continued benefit from Windows 10 end of support16. In March, OEMs built inventory because memory prices were rising17. Each of those borrowed demand from a later quarter, and the line's growth fell through the year, from plus 5.1% in September to minus 0.7%, minus 2.5% and minus 7.3% in June18. Microsoft reported Windows OEM and Devices down 7% in the June quarter19.

In dollars the line fell from $4.6 billion in the September 2025 quarter to $4.0 billion in June20. The 10-K now lists the growth of the AI PC category among the things that move Windows revenue21, and Surface itself now includes Copilot+ PCs22; neither has yet shown up as growth in the line.

Devices have shrunk throughout. Surface grew 3% in fiscal 202223, and Devices revenue has fallen or held back the line in every year since24252627.

Its profit is buried in More Personal Computing, which earned 26.6% of revenue in fiscal 202628. That segment's gross margin rose, which the filing attributes to a shift "to higher margin businesses"29: selling fewer Surfaces and more Windows licences and search ads raises the margin even when revenue does not grow. A Windows licence costs almost nothing to deliver, so the line is probably far more profitable than its size suggests, but that is an inference.

The competition the 10-K names is broad too: Windows faces competition from various software products and from alternative platforms and devices30. The PC is still where most office work is done, which is why the line is steady, and it is no longer where most computing happens, which is why it does not grow.

The line's role in the moat is argued on Platform Flywheel, and the manufacturer relationship on The OEM Channel: Windows by Proxy. Its own numbers say the licence still sells one PC at a time, at the pace the PC market sets, and that fiscal 2026 took some of fiscal 2027's sales in advance.

The test is the June 2027 quarter. Windows and Devices revenue was $4,013 million in the June 2026 quarter31, already 7% lower than a year before. A figure below that would confirm the Windows 10 deadline and the memory-driven stockpiling pulled demand forward; a figure above it would mean the AI PC is starting a replacement cycle of its own.

Moat trajectory: Narrowing

Revenue has been flat for four years and fell through fiscal 2026 from +5.1% to -7.3% a quarter, as the Windows 10 deadline and memory-driven stockpiling pulled demand forward.

The number that tests this moat
Moat Explorer calc
Windows and Devices revenue, June 2026 quarter
$4,013M, -7.3% year on year

The Windows 10 deadline and OEM stockpiling ahead of memory price rises pulled demand into the first half of fiscal 2026. A June 2027 quarter below this figure would confirm the borrowing; one above it would mean the AI PC is starting its own replacement cycle.

How it's calculated: Fourth-quarter revenue = FY2026 revenue in the Form 10-K less the nine-month figure in the Q3 FY2026 Form 10-Q; the year-earlier quarter is computed the same way from the FY2025 figures.
Source: Microsoft Form 10-K FY2026 and Form 10-Q Q3 FY2026 ↗
References
  1. ReportedRevenue was $17.1 billion in fiscal 2026, 5.1% of the company, down $230 million, or 1%.
    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. Moat Explorer calcRevenue was $17.1 billion in fiscal 2026, 5.1% of the company, down $230 million, or 1%.
    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.
  3. ReportedRevenue was $17.1 billion in fiscal 2026, 5.1% of the company, down $230 million, or 1%.
    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. ReportedOn the current basis it was $17,147 million in fiscal 2023, $17,026 million in fiscal 2024 and $17,314 million in fiscal 2025, a compound change of about minus 0.1% a year.
    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 ↗
  5. Moat Explorer calcOn the current basis it was $17,147 million in fiscal 2023, $17,026 million in fiscal 2024 and $17,314 million in fiscal 2025, a compound change of about minus 0.1% a year.
    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.
  6. ReportedThe line has two parts: Windows OEM licensing, meaning Windows Pro and non-Pro licences sold through the manufacturer channel, and Devices, meaning Surface and PC accessories.
    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 ↗
  7. ReportedWindows sold to companies under Microsoft 365 is not here; since the fiscal 2025 recast it sits in Microsoft 365 Commercial.
    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 ↗
  8. ReportedThe 10-K lists what moves the revenue: the number of devices, their mix by form factor, demand in developed and growth markets, the AI PC category, the share of devices that ship with Windows, the mix of consumer, small business and large enterprise buyers, inventory in the channel, pricing, supply constraints and piracy.
    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 ↗
  9. ReportedOn the old definition, Windows revenue was $18.6 billion in fiscal 2017 and $20.4 billion in fiscal 2019, and $24.8 billion in fiscal 2022, when Windows OEM grew 11% on the commercial PC market.
    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 ↗
  10. ReportedOn the old definition, Windows revenue was $18.6 billion in fiscal 2017 and $20.4 billion in fiscal 2019, and $24.8 billion in fiscal 2022, when Windows OEM grew 11% on the commercial PC market.
    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 ↗
  11. ReportedIn fiscal 2023 Windows OEM fell 25% and Devices 24% as "elevated channel inventory levels continued to drive additional weakness beyond declining PC demand".
    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 ↗
  12. ReportedWindows OEM recovered 7% in fiscal 2024 while Devices fell 15%; Windows OEM and Devices together grew 3% in fiscal 2025.
    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 ↗
  13. ReportedWindows OEM recovered 7% in fiscal 2024 while Devices fell 15%; Windows OEM and Devices together grew 3% in fiscal 2025.
    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 ↗
  14. ReportedWindows OEM grew 5% for the year, with inventory levels that remained elevated.
    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 ↗
  15. ReportedThe September quarter's 18% OEM growth came from "demand ahead of Windows 10 end of support", and the December quarter still had continued benefit from Windows 10 end of support.
    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 ↗
  16. ReportedThe September quarter's 18% OEM growth came from "demand ahead of Windows 10 end of support", and the December quarter still had continued benefit from Windows 10 end of support.
    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 ↗
  17. ReportedIn March, OEMs built inventory because memory prices were rising.
    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 ↗
  18. Moat Explorer calcEach of those borrowed demand from a later quarter, and the line's growth fell through the year, from plus 5.1% in September to minus 0.7%, minus 2.5% and minus 7.3% in June.
    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.
  19. ReportedMicrosoft reported Windows OEM and Devices down 7% in the June quarter.
    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 ↗
  20. Moat Explorer calcIn dollars the line fell from $4.6 billion in the September 2025 quarter to $4.0 billion in June.
    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.
  21. ReportedThe 10-K now lists the growth of the AI PC category among the things that move Windows revenue, and Surface itself now includes Copilot+ PCs; neither has yet shown up as growth in the 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 ↗
  22. ReportedThe 10-K now lists the growth of the AI PC category among the things that move Windows revenue, and Surface itself now includes Copilot+ PCs; neither has yet shown up as growth in the 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 ↗
  23. ReportedSurface grew 3% in fiscal 2022, and Devices revenue has fallen or held back the line in every year since.
    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 ↗
  24. ReportedSurface grew 3% in fiscal 2022, and Devices revenue has fallen or held back the line in every year since.
    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 ↗
  25. ReportedSurface grew 3% in fiscal 2022, and Devices revenue has fallen or held back the line in every year since.
    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 ↗
  26. ReportedSurface grew 3% in fiscal 2022, and Devices revenue has fallen or held back the line in every year since.
    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 ↗
  27. ReportedSurface grew 3% in fiscal 2022, and Devices revenue has fallen or held back the line in every year since.
    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 ↗
  28. Moat Explorer calcIts profit is buried in More Personal Computing, which earned 26.6% of revenue 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.
  29. ReportedThat segment's gross margin rose, which the filing attributes to a shift "to higher margin businesses": selling fewer Surfaces and more Windows licences and search ads raises the margin even when revenue does not grow.
    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 ↗
  30. ReportedThe competition the 10-K names is broad too: Windows faces competition from various software products and from alternative platforms and devices.
    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 ↗
  31. Moat Explorer calcWindows and Devices revenue was $4,013 million in the June 2026 quarter, already 7% lower than a year before.
    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.
Sources
Generated September 22, 2026