MICROSOFT CORP Revenue Disclosure
NOTE 12 — UNEARNED REVENUE
Unearned revenue by segment was as follows:
(In millions) |
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June 30, |
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2025 |
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2024 |
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Productivity and Business Processes |
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$ |
50,567 |
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$ |
43,599 |
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Intelligent Cloud |
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14,022 |
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13,683 |
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More Personal Computing |
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2,676 |
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2,902 |
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Total |
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$ |
67,265 |
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$ |
60,184 |
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We have recast certain prior period amounts to conform to the way we internally manage and monitor our business. Refer to Note 1 – Accounting Policies for further information.
Changes in unearned revenue were as follows:
(In millions) |
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Year Ended June 30, 2025 |
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Balance, beginning of period |
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$ |
60,184 |
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Deferral of revenue |
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186,957 |
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Recognition of unearned revenue |
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(179,876 |
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Balance, end of period |
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$ |
67,265 |
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Revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, was $375 billion as of June 30, 2025, of which $368 billion is related to the commercial portion of revenue. We expect to recognize approximately 40% of our total company remaining performance obligation revenue over the next 12 months and the remainder thereafter.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 30, 2025 | Showing above |
| 2024 | Jul 30, 2024 | |
| 2023 | Jul 27, 2023 | |
| 2022 | Jul 28, 2022 | |
| 2021 | Jul 29, 2021 | |
| 2020 | Jul 30, 2020 | |
| 2019 | Aug 1, 2019 | |
| 2018 | Aug 3, 2018 | |
| 2017 | Aug 2, 2017 | |
| 2016 | Jul 28, 2016 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.