HyperscalersMSFTFilings through October 28, 2026

Microsoft capital spending

In the quarter ended September 30, 2026, Microsoft spent $39.4 billion on capital equipment, 68% of its $58.0 billion of operating cash flow and up 103% from a year earlier. Free cash flow was $18.6 billion, and long-term debt rose by $0.0 billion.

Next report: January 26, 2027. Provider schedule, not yet confirmed by the company. The full calendar.

Sources, method and freshnessFilings through October 28, 2026

Microsoft’s 10-Q and 10-K filings, latest-filed value per period. Filing history at SEC EDGAR.

Cite as The Capex Report, Microsoft capital spending, filings through October 28, 2026.

Spending against cash flow

$ billion, quarterly
Microsoft, quarterly capital spending and operating cash flow through Sep 2026
Sep 2026Capital spending $39.4BOperating cash flow $58.0BFree cash flow $18.6B
0204060$ billionDec 2022Jun 2023Dec 2023Jun 2024Dec 2024Jun 2025Dec 2025Sep 2026

Bars are capital spending, the line is operating cash flow, red below the axis is free cash flow when negative. Hover a quarter to read it. 16 reported quarters shown.

Microsoft’s quarterly capital spending has been above the same quarter a year earlier for 27 consecutive quarters, and Sep 2026 was the highest quarter in the 60-quarter record held here. Over the latest four quarters it generated $195.9 billion from operations and spent $135.9 billion, leaving $60.0 billion of free cash flow against $78.0 billion over the four before.

Microsoft, sources and uses of cash by quarter through Sep 2026
$ billion, quarterly. Sources above the axis, uses below.
Sep 2026Operating cash flow $58.0BLong-term debt issued $0.0MShort-term borrowing, net $0.0MCapital spending $39.4BFinance-lease principal $1.0BLong-term debt repaid $4.9BReturned to shareholders $11.1BChange in cash −$654.0M
10050050100Jun 2024Mar 2025Dec 2025Sep 2026
Operating cash flowLong-term debt issuedShort-term borrowing, netCapital spendingFinance-lease principalLong-term debt repaidReturned to shareholdersChange in cash

The dot is the quarter’s change in cash. Hover a quarter to read it.

Sources and uses of cash by quarter, millions of US dollars. Outflows are shown as positive amounts, as the filings report them.
Millions of dollarsDec 2024
Q2 FY2025
Mar 2025
Q3 FY2025
Jun 2025
Q4 FY2025
Sep 2025
Q1 FY2026
Dec 2025
Q2 FY2026
Mar 2026
Q3 FY2026
Jun 2026
Q4 FY2026
Sep 2026
Q1 FY2027
Operating cash flow22,29137,04442,64745,05735,75846,67955,44158,000
Long-term debt issued00000000
Short-term borrowing, net00000000
Stock issued256546548689259541520598
Capital spending15,80416,74517,07919,39429,87630,87635,80239,367
Finance-lease principal4803526496397018399221,000
Long-term debt repaid02,250003,000004,850
Share repurchases4,9864,7814,5465,6507,4154,6274,5794,379
Dividends6,1706,1696,1696,1696,7626,7566,7586,757
Free cash flow6,48720,29925,56825,6635,88215,80319,63918,633
Net long-term debt issued0(2,250)00(3,000)00(4,850)
Returned to shareholders11,15610,95010,71511,81914,17711,38311,33711,136
Outside funding needed5,149(8,997)(14,204)(13,205)8,996(3,581)(7,380)(6,497)
Change in cash(3,358)11,3461,414(1,393)(4,553)7,809(11,170)(654)
Interest expense594594615698736778839870
Stock-based compensation3,0892,9803,0732,9833,2193,0813,1223,134

Millions of dollars, outflows positive as reported in the cash flow statement.

Capex including finance leases

Across the hyperscalers
Microsoft, cash capital spending and equipment acquired under finance leases, by fiscal quarter
$ billion, quarterly
Sep 2026Cash capital spending $39.4BAcquired under finance leases $5.2B
01020304050Dec 2022Sep 2023Jun 2024Mar 2025Dec 2025Sep 2026
Cash capital spendingAcquired under finance leases
Microsoft capital spending including finance leases, millions of US dollars
Millions of dollarsDec 2024
Q2 FY2025
Mar 2025
Q3 FY2025
Jun 2025
Q4 FY2025
Sep 2025
Q1 FY2026
Dec 2025
Q2 FY2026
Mar 2026
Q3 FY2026
Jun 2026
Q4 FY2026
Sep 2026
Q1 FY2027
Cash capital spending15,80416,74517,07919,39429,87630,87635,80239,367
Equipment acquired under finance leases6,4353,2416,5039,1476,3304,0095,1225,192
Capital spending including finance leases22,23919,98623,58228,54136,20634,88540,92444,559
Finance-lease principal paid4803526496397018399221,000
Finance-lease liability36,07739,21446,17254,43460,15162,93266,59470,973
Operating-lease liability21,86222,92422,86122,73322,86522,23821,92527,477

Equipment acquired under finance leases is a non-cash addition disclosed in the filings; it is not in cash capital spending. Reported in 43 of 73 quarters on file.

Microsoft, net debt by fiscal quarter; below zero is net cash
$ billion at quarter end
Sep 2026Net cash $66.8BGross debt $35.5B
−150−100−50050Dec 2022Sep 2023Jun 2024Mar 2025Dec 2025Sep 2026
Net debtNet cashGross debt
Microsoft balance sheet, millions of US dollars
Millions of dollarsDec 2024
Q2 FY2025
Mar 2025
Q3 FY2025
Jun 2025
Q4 FY2025
Sep 2025
Q1 FY2026
Dec 2025
Q2 FY2026
Mar 2026
Q3 FY2026
Jun 2026
Q4 FY2026
Sep 2026
Q1 FY2027
Cash and equivalents17,48228,82830,24228,84924,29632,10520,93520,281
Short-term investments54,07350,79064,32373,16365,16646,16755,90844,228
Long-term investments15,58116,03515,40511,46521,20233,68336,34837,808
Cash and investments87,13695,653109,970113,477110,664111,955113,191102,317
Long-term debt39,72239,88240,15235,37635,42531,42331,06731,090
Current debt5,2482,9992,9997,8324,8378,8399,2274,391
Commercial paper000—————
Gross debt44,97042,88143,15143,20840,26240,26240,29435,481
Finance-lease liability36,07739,21446,17254,43460,15162,93266,59470,973
Net debt(42,166)(52,772)(66,819)(70,269)(70,402)(71,693)(72,897)(66,836)
Property and equipment, net, as reported166,902183,939204,966230,861261,126283,228313,076346,844
Accumulated depreciation82,82087,07493,65398,880104,950111,723118,691127,208
Inventory9098489381,1301,0591,2191,3971,835
Inventory days4 days4 days4 days4 days4 days4 days4 days6 days
Total assets533,898562,624619,003636,351665,302694,228758,376779,403
Shareholders’ equity302,695321,891343,479363,076390,875414,367442,387470,509
Interest expense594594615698736778839870
Effective interest cost2.9%2.9%2.8%2.9%2.9%3.0%3.1%3.3%
Stock-based compensation3,0892,9803,0732,9833,2193,0813,1223,134
Shares outstanding, millions7,4357,4347,4347,4347,4297,4297,4277,427

Quarter-end balances. Gross debt is long-term plus current debt as reported; net debt is gross debt less cash and investments, negative when the company holds more than it owes.

Where the revenue is

Across the companies
Microsoft, Agents and Infrastructure segment (from FY2027) revenue (bars) and operating income (line), by fiscal quarter
$ billion, quarterly
Sep 2026Agents and Infrastructure segment (from FY2027) revenue $76.8BOperating income $40.6B
020406080Sep 2026
Agents and Infrastructure segment (from FY2027) revenueOperating income

Agents and Infrastructure segment (from FY2027): $76.8B of revenue in Sep 2026, $40.6B of operating income (52.8% margin). Microsoft re-segmented in fiscal 2027; Intelligent Cloud is the predecessor series. Members read: *=AgentsAndInfraMember.

Microsoft, Intelligent Cloud segment revenue (bars) and operating income (line), by fiscal quarter
$ billion, quarterly
Mar 2026Intelligent Cloud segment revenue $34.7BOperating income $13.8B
010203040Mar 2022Mar 2023Mar 2024Mar 2025Mar 2026
Intelligent Cloud segment revenueOperating income

Intelligent Cloud segment: $34.7B of revenue in Mar 2026, $13.8B of operating income (39.7% margin). Members read: StatementBusinessSegmentsAxis=IntelligentCloudMember.

Microsoft, Azure revenue, by fiscal quarter
$ billion, quarterly
Sep 2026Azure revenue $33.2B
010203040Sep 2026
Azure revenue

Azure: $33.2B of revenue in Sep 2026. Revenue only; Microsoft began tagging Azure in fiscal 2027. Members read: *=AzureMember.

Segments are the company’s own, as tagged in its segment note, and are not comparable across companies. Operating income is reported only for reportable segments.

Microsoft bonds, notes, term loans and facilities since 2026
PricedTypeTranches and maturitiesCouponsAmount, $ millionsConfidenceFiling
Oct 29, 2026Registered notes10 tranches, 2028 to 20664.85 to 6.35%25,000High: term sheetFWP

In 2026 Microsoft has priced $25.0B of notes and term loans in 1 filing. Read from pricing term sheets, prospectus supplements and 8-K filings; commercial paper and bank lines drawn without an 8-K are not here, and the cash flow statement above remains the complete record.

Demand behind the capex

All companies, side by side
Microsoft, remaining performance obligations (bars) and quarterly revenue (line), by fiscal quarter
$ billion, quarterly
Sep 2026Remaining performance obligations $683.0BQuarterly revenue $92.3B
0200400600800Dec 2022Sep 2023Jun 2024Mar 2025Dec 2025Sep 2026
Remaining performance obligationsQuarterly revenue
Microsoft contracted revenue, millions of US dollars
Millions of dollarsDec 2024
Q2 FY2025
Mar 2025
Q3 FY2025
Jun 2025
Q4 FY2025
Sep 2025
Q1 FY2026
Dec 2025
Q2 FY2026
Mar 2026
Q3 FY2026
Jun 2026
Q4 FY2026
Sep 2026
Q1 FY2027
Revenue69,63270,06676,44177,67381,27382,88690,00792,279
Remaining performance obligations304,000321,000375,000398,000631,000633,000684,000683,000
Backlog over trailing revenue1.2×1.2×1.3×1.4×2.1×2.0×2.1×2.0×
Deferred revenue, current45,50844,63664,55558,98751,37650,92472,96566,866
Deferred revenue48,04547,47667,26561,53354,04453,67775,71269,563

At Sep 2026 Microsoft carried $683.0B of remaining performance obligations, 2.0× its trailing four quarters of revenue. Remaining performance obligations are contracted revenue not yet recognised, under the company’s own definition; deferred revenue is the part already billed. Neither is comparable across companies.

Depreciation against capex

The five hyperscalers combined
Microsoft, depreciation of property and equipment (bars) and capital spending (line), by fiscal quarter
$ billion, quarterly
Sep 2026Depreciation of property and equipment $11.1BCapital spending $39.4B
010203040Dec 2022Sep 2023Jun 2024Mar 2025Dec 2025Sep 2026
Depreciation of property and equipmentCapital spending
Microsoft capital spending and depreciation, millions of US dollars
Millions of dollarsDec 2024
Q2 FY2025
Mar 2025
Q3 FY2025
Jun 2025
Q4 FY2025
Sep 2025
Q1 FY2026
Dec 2025
Q2 FY2026
Mar 2026
Q3 FY2026
Jun 2026
Q4 FY2026
Sep 2026
Q1 FY2027
Capital spending15,80416,74517,07919,39429,87630,87635,80239,367
Depreciation of property and equipment5,2005,8006,3007,1007,9009,00010,30011,100
Capex to depreciation3.0×2.9×2.7×2.7×3.8×3.4×3.5×3.5×
Amortization of intangibles1,5001,5001,5001,5001,2001,1001,0001,000
Depreciation and amortization, as reported6,7007,3007,8008,6009,10010,10011,30012,100
Property and equipment, net, as reported166,902183,939204,966230,861261,126283,228313,076346,844
Property and equipment, gross——298,619329,741366,076394,951431,767474,052

In Sep 2026 Microsoft spent 3.5× what it recorded as depreciation of property and equipment. Depreciation of property and equipment excludes amortization of acquired intangibles, shown separately. Depreciation reported in 9 of 78 quarters on file.

Quarterly financial statement in millions of US dollars. Negative amounts are in parentheses.
Millions of dollarsDec 2024
Q2 FY2025
Mar 2025
Q3 FY2025
Jun 2025
Q4 FY2025
Sep 2025
Q1 FY2026
Dec 2025
Q2 FY2026
Mar 2026
Q3 FY2026
Jun 2026
Q4 FY2026
Sep 2026
Q1 FY2027
Revenue69,63270,06676,44177,67381,27382,88690,00792,279
Operating cash flow22,29137,04442,64745,05735,75846,67955,44158,000
Capital spending15,80416,74517,07919,39429,87630,87635,80239,367
Free cash flow6,48720,29925,56825,6635,88215,80319,63918,633
Depreciation and amortization6,7007,3007,8008,6009,10010,10011,30012,100
Long-term debt39,72239,88240,15235,37635,42531,42331,06731,090
First filed / release dateJan 29, 2025Apr 30, 2025Jul 30, 2025Oct 29, 2025Jan 28, 2026Apr 29, 2026Jul 29, 2026Oct 28, 2026

Millions of dollars. Negatives in parentheses. A dash means the filing did not report it or the extract withheld it. Fiscal quarter labels follow the company’s calendar.

Questions this page answers

How much did Microsoft spend on capital expenditures last quarter?
Microsoft spent $39.4 billion on purchases of property and equipment in the quarter ended September 30, 2026, up 103% from the same quarter a year earlier. Over its latest four reported quarters it spent $135.9 billion.
Did Microsoft's capital spending exceed its operating cash flow?
No. In the quarter ended September 30, 2026 capital spending was 68% of Microsoft's $58.0 billion of operating cash flow, leaving free cash flow of $18.6 billion.
What is Microsoft's free cash flow?
$18.6 billion in the quarter ended September 30, 2026, and $60.0 billion over the latest four reported quarters, against $78.0 billion over the four before. Free cash flow here is operating cash flow less purchases of property and equipment, as the company reports them. All four of the last four quarters were positive.
Is Microsoft's capital spending still rising?
Yes. Microsoft's quarterly capital spending has been above the same quarter a year earlier for 27 consecutive quarters, and Sep 2026 was the highest quarter in its 60-quarter record on this site. The latest four quarters' spending is 97% above the four before.
Did Microsoft borrow to fund its spending?
Microsoft's long-term debt rose by $0.0 billion over the quarter ended September 30, 2026. The balance-sheet change is a proxy for net borrowing: maturities, reclassification and acquisitions also move it, and the cash flow statement's financing lines are the exact record.
Is this Microsoft's AI spending?
No. These are Microsoft's company-wide purchases of property and equipment from its cash flow statement, which include everything from data centers to offices and vehicles. The company does not report an AI line, and this page does not estimate one.

Terms used on this page

Capital expenditures (capex)Free cash flowCapex versus depreciationLong-term debt. The methodology sets out every definition and its limits.