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.

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.

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.

Microsoft, quarter ended September 30, 2026

68%

Share of operating cash flow

Below 100%: covered by operations

Capital spending, quarter: $39.4B; +103.0% against the same quarter a year earlier
Free cash flow, quarter: $18.6B; Operating cash flow less purchases of property and equipment
Capital spending, four quarters: $135.9B; +96.9% against the four quarters before
Long-term debt, change: +$23.0M; Balance-sheet change over the quarter, a proxy for net borrowing
Spend to depreciation: 3.5×; Capital spending as a multiple of the quarter’s depreciation of property and equipment

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

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.

Financing the build

The five hyperscalers combined

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

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 dollars	Dec 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 flow	22,291	37,044	42,647	45,057	35,758	46,679	55,441	58,000
Long-term debt issued	0	0	0	0	0	0	0	0
Short-term borrowing, net	0	0	0	0	0	0	0	0
Stock issued	256	546	548	689	259	541	520	598
Capital spending	15,804	16,745	17,079	19,394	29,876	30,876	35,802	39,367
Finance-lease principal	480	352	649	639	701	839	922	1,000
Long-term debt repaid	0	2,250	0	0	3,000	0	0	4,850
Share repurchases	4,986	4,781	4,546	5,650	7,415	4,627	4,579	4,379
Dividends	6,170	6,169	6,169	6,169	6,762	6,756	6,758	6,757
Free cash flow	6,487	20,299	25,568	25,663	5,882	15,803	19,639	18,633
Net long-term debt issued	0	(2,250)	0	0	(3,000)	0	0	(4,850)
Returned to shareholders	11,156	10,950	10,715	11,819	14,177	11,383	11,337	11,136
Outside funding needed	5,149	(8,997)	(14,204)	(13,205)	8,996	(3,581)	(7,380)	(6,497)
Change in cash	(3,358)	11,346	1,414	(1,393)	(4,553)	7,809	(11,170)	(654)
Interest expense	594	594	615	698	736	778	839	870
Stock-based compensation	3,089	2,980	3,073	2,983	3,219	3,081	3,122	3,134

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

Cash capital spendingAcquired under finance leases

Microsoft capital spending including finance leases, millions of US dollars
Millions of dollars	Dec 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 spending	15,804	16,745	17,079	19,394	29,876	30,876	35,802	39,367
Equipment acquired under finance leases	6,435	3,241	6,503	9,147	6,330	4,009	5,122	5,192
Capital spending including finance leases	22,239	19,986	23,582	28,541	36,206	34,885	40,924	44,559
Finance-lease principal paid	480	352	649	639	701	839	922	1,000
Finance-lease liability	36,077	39,214	46,172	54,434	60,151	62,932	66,594	70,973
Operating-lease liability	21,862	22,924	22,861	22,733	22,865	22,238	21,925	27,477

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.

The balance sheet

The five hyperscalers combined

Microsoft, net debt by fiscal quarter; below zero is net cash

$ billion at quarter end

Sep 2026Net cash $66.8BGross debt $35.5B

Net debtNet cashGross debt

Microsoft balance sheet, millions of US dollars
Millions of dollars	Dec 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 equivalents	17,482	28,828	30,242	28,849	24,296	32,105	20,935	20,281
Short-term investments	54,073	50,790	64,323	73,163	65,166	46,167	55,908	44,228
Long-term investments	15,581	16,035	15,405	11,465	21,202	33,683	36,348	37,808
Cash and investments	87,136	95,653	109,970	113,477	110,664	111,955	113,191	102,317
Long-term debt	39,722	39,882	40,152	35,376	35,425	31,423	31,067	31,090
Current debt	5,248	2,999	2,999	7,832	4,837	8,839	9,227	4,391
Commercial paper	0	0	0	—	—	—	—	—
Gross debt	44,970	42,881	43,151	43,208	40,262	40,262	40,294	35,481
Finance-lease liability	36,077	39,214	46,172	54,434	60,151	62,932	66,594	70,973
Net debt	(42,166)	(52,772)	(66,819)	(70,269)	(70,402)	(71,693)	(72,897)	(66,836)
Property and equipment, net, as reported	166,902	183,939	204,966	230,861	261,126	283,228	313,076	346,844
Accumulated depreciation	82,820	87,074	93,653	98,880	104,950	111,723	118,691	127,208
Inventory	909	848	938	1,130	1,059	1,219	1,397	1,835
Inventory days	4 days	4 days	4 days	4 days	4 days	4 days	4 days	6 days
Total assets	533,898	562,624	619,003	636,351	665,302	694,228	758,376	779,403
Shareholders’ equity	302,695	321,891	343,479	363,076	390,875	414,367	442,387	470,509
Interest expense	594	594	615	698	736	778	839	870
Effective interest cost	2.9%	2.9%	2.8%	2.9%	2.9%	3.0%	3.1%	3.3%
Stock-based compensation	3,089	2,980	3,073	2,983	3,219	3,081	3,122	3,134
Shares outstanding, millions	7,435	7,434	7,434	7,434	7,429	7,429	7,427	7,427

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

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

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

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.

Debt issued

The ledger across all companies

Microsoft bonds, notes, term loans and facilities since 2026
Priced	Type	Tranches and maturities	Coupons	Amount, $ millions	Confidence	Filing
Oct 29, 2026	Registered notes	10 tranches, 2028 to 2066	4.85 to 6.35%	25,000	High: term sheet	FWP

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

Remaining performance obligationsQuarterly revenue

Microsoft contracted revenue, millions of US dollars
Millions of dollars	Dec 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
Revenue	69,632	70,066	76,441	77,673	81,273	82,886	90,007	92,279
Remaining performance obligations	304,000	321,000	375,000	398,000	631,000	633,000	684,000	683,000
Backlog over trailing revenue	1.2×	1.2×	1.3×	1.4×	2.1×	2.0×	2.1×	2.0×
Deferred revenue, current	45,508	44,636	64,555	58,987	51,376	50,924	72,965	66,866
Deferred revenue	48,045	47,476	67,265	61,533	54,044	53,677	75,712	69,563

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

Depreciation of property and equipmentCapital spending

Microsoft capital spending and depreciation, millions of US dollars
Millions of dollars	Dec 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 spending	15,804	16,745	17,079	19,394	29,876	30,876	35,802	39,367
Depreciation of property and equipment	5,200	5,800	6,300	7,100	7,900	9,000	10,300	11,100
Capex to depreciation	3.0×	2.9×	2.7×	2.7×	3.8×	3.4×	3.5×	3.5×
Amortization of intangibles	1,500	1,500	1,500	1,500	1,200	1,100	1,000	1,000
Depreciation and amortization, as reported	6,700	7,300	7,800	8,600	9,100	10,100	11,300	12,100
Property and equipment, net, as reported	166,902	183,939	204,966	230,861	261,126	283,228	313,076	346,844
Property and equipment, gross	—	—	298,619	329,741	366,076	394,951	431,767	474,052

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.

The statement

Download the source data

Quarterly financial statement in millions of US dollars. Negative amounts are in parentheses.
Millions of dollars	Dec 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
Revenue	69,632	70,066	76,441	77,673	81,273	82,886	90,007	92,279
Operating cash flow	22,291	37,044	42,647	45,057	35,758	46,679	55,441	58,000
Capital spending	15,804	16,745	17,079	19,394	29,876	30,876	35,802	39,367
Free cash flow	6,487	20,299	25,568	25,663	5,882	15,803	19,639	18,633
Depreciation and amortization	6,700	7,300	7,800	8,600	9,100	10,100	11,300	12,100
Long-term debt	39,722	39,882	40,152	35,376	35,425	31,423	31,067	31,090
First filed / release date	Jan 29, 2025	Apr 30, 2025	Jul 30, 2025	Oct 29, 2025	Jan 28, 2026	Apr 29, 2026	Jul 29, 2026	Oct 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 flow Capex versus depreciation Long-term debt. The methodology sets out every definition and its limits.

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