A summary and discussion on Microsoft's income statements

Over the five fiscal years from 2021 to 2025, Microsoft demonstrated consistently strong revenue and profit growth, with accelerating momentum in the most recent two years. Annual revenue rose from $168.1 billion in 2021 to $281.7 billion in 2025, representing a compound annual growth rate (CAGR) of approximately 13.8%. Revenue growth dipped to 6.9% in 2023 but rebounded sharply to 15.7% in 2024 and 14.9% in 2025, reflecting robust demand for cloud and artificial intelligence services. Gross profit margin remained remarkably stable, averaging close to 69% over the period, indicating strong pricing power and effective cost control. Operating income (EBIT) grew even faster than revenue, from $69.9 billion in 2021 to $128.5 billion in 2025, a CAGR of 16.4%, as selling, general and administrative expenses increased at a slower pace (6.2% in 2025) than sales. Net income expanded from $61.3 billion to $101.8 billion over the same span, with net margin improving from 36.4% to 36.1% (roughly stable despite higher depreciation and amortization). A notable feature of the period was the sharp rise in depreciation and amortization, which jumped from $10.9 billion in 2021 to $34.2 billion in 2025, driven by heavy investment in data centers and cloud infrastructure. Diluted earnings per share grew from $8.05 to $13.64, a 14.1% CAGR, benefiting from share buybacks (diluted shares outstanding fell from 7.61 billion to 7.47 billion). The effective tax rate remained moderate, with deferred domestic taxes providing a consistent benefit. Overall, the five‑year trend shows a resilient, high‑margin business with operating leverage and a successful shift toward higher‑value cloud and AI offerings.

Turning to the latest five quarterly income statements (from March 2025 through March 2026), Microsoft continued to post sequential revenue gains, albeit with some quarterly volatility in profitability. Revenue increased steadily from $70.1 billion in the quarter ended March 2025 to $82.9 billion in March 2026, a cumulative rise of 18.3% over four quarters. The strongest sequential growth occurred in the December 2025 quarter, when revenue rose 4.6% to $81.3 billion, likely driven by seasonal enterprise spending. Gross margins remained healthy, ranging between 67.6% and 69.0% across the five quarters. EBITDA margins also stayed robust, near 57‑59% of revenue, with a peak of $51.0 billion in the September 2025 quarter. However, net income showed a more erratic pattern. After climbing from $25.8 billion in March 2025 to $27.2 billion in June 2025, $27.7 billion in September 2025, and a strong $38.5 billion in December 2025, net income fell sharply to $31.8 billion in March 2026 – a 17.4% sequential decline. This drop occurred despite a 2.0% revenue increase in the same quarter, suggesting margin pressure. Possible contributors include a sequential rise in SG&A expenses (from $15.7 billion to $17.7 billion), a higher tax provision (from $5.4 billion to $7.6 billion), and perhaps non‑operating items (interest income and expense moved only modestly). Diluted EPS followed the same trajectory, peaking at $5.16 in December 2025 and then retreating to $4.27 in March 2026. While the December quarter’s strength could reflect year‑end booking patterns, the March 2026 decline is notable and warrants monitoring.

In summary, Microsoft’s long‑term financial health remains excellent, with double‑digit annual growth and high margins. Nevertheless, the most recent quarterly results introduce a note of caution: profitability appears more sensitive to operating expenses and taxes, and investors will be watching to see if the March 2026 dip is a seasonal anomaly or the start of a new margin trend.

A summary and discussion of Meta’s income statements

A summary and discussion of Meta’s five‑year annual income statements (2021–2025) and the latest five quarterly statements (Q1 2025 – Q1 2026).

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### Five‑Year Annual Summary (2021–2025)

Over the past five years, Meta has delivered strong top‑line growth with revenue rising from $117.9 billion in 2021 to $200.9 billion in 2025, representing a compound annual growth rate of approximately 14%. After a slight revenue decline of 1.1% in 2022, growth re‑accelerated to 15.7% in 2023, 21.9% in 2024, and 22.2% in 2025, indicating a robust recovery driven by stronger advertising demand and improved monetization. Gross profit margin improved steadily from around 80% in 2021 to 82% in 2025, reflecting efficient cost of goods sold management. However, operating expenses – particularly research and development – grew dramatically; R&D spending more than doubled from $24.7 billion to $57.4 billion over the five years, as Meta invested heavily in artificial intelligence, data center infrastructure, and the metaverse. Selling, general and administrative expenses also increased but at a more moderate pace. Earnings before interest and taxes (EBIT) grew from $46.8 billion in 2021 to $83.3 billion in 2025, though 2022 was a weak year due to $4.6 billion in unusual expenses. Net income showed volatility: it fell to $23.2 billion in 2022, rebounded to $39.1 billion in 2023 and $62.4 billion in 2024, then declined slightly to $60.5 billion in 2025 – a 3% drop despite the 22% revenue increase. This anomaly is almost entirely explained by a surge in income tax expense to $25.5 billion in 2025 from $8.3 billion in 2024, driven by a large deferred domestic tax charge of $18.8 billion, which appears to be a non‑cash, one‑time item. Consequently, diluted earnings per share followed a similar pattern: $13.77 in 2021, $8.59 in 2022, $14.87 in 2023, $23.86 in 2024, and $23.49 in 2025. Depreciation and amortization expense more than doubled over the period, reaching $18.6 billion in 2025, consistent with Meta’s heavy capital expenditure on servers and facilities. Overall, the annual data show a company with powerful revenue momentum and stable gross margins, but with reported net income increasingly distorted by tax accounting and high investment spending.

### Latest Five Quarters (Q1 2025 – Q1 2026)

The quarterly data provide a more granular view of Meta’s recent performance and reveal significant volatility in net income driven almost entirely by tax items. Revenue grew sequentially from $42.3 billion in Q1 2025 to $59.9 billion in Q4 2025, a typical seasonal pattern with a strong holiday quarter, then declined 6% to $56.3 billion in Q1 2026 – though on a year‑over‑year basis Q1 2026 revenue was 33% higher than Q1 2025, indicating continued robust growth. Gross margin remained consistently around 82% throughout the five quarters. Operating earnings before interest, taxes, depreciation, and amortization (EBITDA) showed steady improvement, rising from $21.5 billion in Q1 2025 to $30.2 billion in Q4 2025, then easing slightly to $28.9 billion in Q1 2026 in line with the seasonal revenue dip. However, reported net income was highly erratic: Q1 2025 net income was $16.6 billion, Q2 2025 $18.3 billion, Q3 2025 plunged to just $2.7 billion, Q4 2025 rebounded to $22.8 billion, and Q1 2026 surged to $26.8 billion. The Q3 2025 collapse was not due to operational weakness – revenue was $51.2 billion and EBITDA was $25.5 billion – but rather an enormous income tax expense of $19.0 billion, likely a one‑time deferred tax charge or settlement. Conversely, Q1 2026 net income received a tax benefit of negative $5.0 billion, artificially boosting the bottom line. Interest expense grew from $240 million in Q1 2025 to $562 million in Q1 2026, reflecting higher debt or interest rates, and an unusual expense of $1.4 billion appeared in Q1 2026, possibly for restructuring or legal matters. In summary, the quarterly statements confirm that Meta’s core operations remain exceptionally healthy – revenue growth is accelerating, EBITDA is strong and stable, and gross margins are best‑in‑class – but reported net income has become a misleading metric due to large, non‑recurring tax adjustments. Investors and analysts are better served by focusing on revenue, EBITDA, and free cash flow to assess the underlying business momentum.

A summary of Broadcom’s income statements

A summary of Broadcom’s five-year annual income statements (fiscal years ending October, 2021–2025) and its latest five quarterly income statements (ending April 2025 through April 2026).

**Five‑Year Annual Summary (2021–2025)**  

Over the past five fiscal years, Broadcom has more than doubled its revenue, rising from $27.45 billion in 2021 to $63.89 billion in 2025. This growth was driven first by robust semiconductor demand and then turbocharged by the acquisition of VMware in late 2023. Revenue growth fluctuated: a 20.96% increase in 2022, a slower 7.88% in 2023, then a sharp 43.99% jump in 2024 as VMware started to consolidate, followed by a still‑strong 23.87% in 2025. Gross profit margin improved to 64.71% by 2025. Operating leverage is evident in EBITDA, which grew from $14.73 billion in 2021 to $34.93 billion in 2025, with the EBITDA margin reaching 54.67%. Net income was more volatile: it increased from $6.74 billion in 2021 to $14.08 billion in 2023, then plunged to $6.17 billion in 2024 due to one‑time acquisition‑related costs (especially a surge in SG&A and amortization of intangibles). In 2025, net income rebounded to a record $23.13 billion, representing a 274.9% increase year‑over‑year, and diluted EPS soared to $4.77 from $1.23 in 2024. The VMware acquisition, after an initial earnings drag, has clearly become a powerful contributor to both top‑line and bottom‑line growth.

**Latest Five‑Quarter Summary (April 2025 – April 2026)**  

The quarterly data shows accelerating momentum. Revenue stepped up sequentially from $15.00 billion in the quarter ended April 2025 to $15.95 billion (July 2025), $18.02 billion (October 2025), $19.31 billion (January 2026), and finally $22.19 billion in April 2026. This represents a 48% year‑over‑year increase for the April 2026 quarter. Gross profit margin remained consistently high, reaching 64.71% in the latest quarter. EBITDA grew from $8.11 billion in April 2025 to $13.03 billion in April 2026, with the EBITDA margin holding at 54.67%. Net income exhibited some quarterly variation – $4.97 billion (April 2025), $4.14 billion (July 2025), then a strong $8.52 billion (October 2025), $7.35 billion (January 2026), and $9.31 billion (April 2026) – reflecting normal fluctuations in tax and non‑operating items. Diluted EPS followed a similar pattern, rising from $1.03 in April 2025 to $1.74 in October 2025, then moderating to $1.50 in January 2026 (data for April 2026 EPS was not provided). The consistent sequential revenue growth and expanding profitability underscore Broadcom’s successful integration of VMware and the explosive demand for its AI semiconductor solutions, which have become the primary engine of the company’s financial performance.

A summary and discussion of Alphabet’s income statements.

A summary and discussion of Alphabet’s income statements, covering the five-year annual trends (2021–2025) and the latest five quarters (Q1 2025 – Q1 2026).

**Five-Year Annual Summary (2021–2025)**  

Over the five-year period, Alphabet delivered consistently strong top-line growth, with revenue rising from $257.5 billion in 2021 to $403.0 billion in 2025, representing a compound annual growth rate of approximately 11.8%. The pace of revenue growth accelerated notably in the last two years, from 9.4% in 2023 to 13.9% in 2024 and 15.2% in 2025, reflecting robust demand for Google’s advertising, cloud, and subscription services, likely enhanced by AI-driven product innovations. Profitability improved even more dramatically: gross margin expanded from 56.9% to 59.7%, while EBITDA margin climbed from 35.3% to 38.2%. Net margin bottomed at 21.4% in 2022 due to investment cycles and unusual charges, then recovered to 28.6% in 2024 and reached 32.8% in 2025. However, the 2025 net income of $132.2 billion was significantly boosted by a $20.4 billion unusual gain (primarily mark-to-market investment gains or similar non-recurring items). Excluding this gain, normalized net income would be approximately $111.8 billion, still representing strong growth from 2024’s $100.1 billion. Operating expenses grew steadily, with research and development nearly doubling from $31.6 billion to $61.1 billion, reflecting Alphabet’s commitment to long-term innovation. Share buybacks reduced diluted shares outstanding by roughly 10% over five years, helping drive diluted EPS from $5.61 in 2021 to $10.81 in 2025, a 93% increase.

**Latest Five-Quarter Summary (Q1 2025 – Q1 2026)**  

The quarterly data shows typical seasonality, with revenue rising from $90.0 billion in Q1 2025 to a peak of $114.0 billion in Q4 2025 (up 11.2% sequentially), then easing to $110.1 billion in Q1 2026 (a 3.4% decline, consistent with post-holiday slowdown). Year-over-year, Q1 2026 revenue grew 22.3% compared to Q1 2025, indicating healthy underlying momentum. Gross margin remained stable at approximately 59.7% throughout the five quarters. Underlying EBITDA improved steadily from $34.8 billion in Q1 2025 to $42.1 billion in Q4 2025 and further to $46.5 billion in Q1 2026, suggesting operational efficiency gains even as revenue dipped sequentially. The most striking feature is Q1 2026’s net income of $62.6 billion, more than double the prior quarter’s $34.5 billion, driven by an enormous $36.1 billion unusual gain (negative unusual expense). Excluding this one-time item, normalized pretax income in Q1 2026 would be roughly $41.3 billion, close to Q4 2025’s core level, but still slightly lower. Interest expense spiked in Q1 2026 to $533 million from just $34 million a year earlier, warranting attention. Diluted EPS followed net income trends: $2.81 in Q1 2025, dipping to $2.31 in Q2 2025 (likely due to a discrete tax or expense item), recovering to $2.87 in Q3 2025 and $2.82 in Q4 2025, then surging to $5.11 in Q1 2026 on the back of the unusual gain.

**Discussion & Implications**  

Alphabet’s core business remains exceptionally healthy, characterized by accelerating revenue growth, expanding margins, and disciplined cost control outside of R&D. The annual data shows a clear upward trajectory, though investors should normalize for large, non-recurring gains that inflate net income in 2025 and Q1 2026. The quarterly trend reveals a slight sequential revenue decline in Q1 2026, which, after adjusting for the unusual gain, also points to a modest dip in core earnings. This could signal increasing competitive pressure (e.g., from AI search rivals or cloud pricing) or a natural moderation after a strong 2025. Nevertheless, the steady EBITDA growth suggests underlying operational resilience. Rising interest expense and ongoing antitrust risks are factors to monitor. Overall, Alphabet demonstrates strong financial discipline and scalable profitability, but forward-looking assessments should focus on normalized earnings excluding one-off investment gains.

A summary and discussion of NVIDIA’s income statements

A summary and discussion of NVIDIA’s income statements, based on the latest five quarters (April 2025 – April 2026) and the last five fiscal years (2022–2026).

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Over the latest five quarters, NVIDIA’s revenue has shown remarkable and accelerating momentum. Starting at $44.1 billion in April 2025, revenue rose to $46.7 billion in July 2025 (6.1% growth), then jumped to $57.0 billion in October 2025 (22.0% growth), $68.1 billion in January 2026 (19.5% growth), and finally $81.6 billion in April 2026 (19.8% growth). This sequence demonstrates that after a relatively subdued quarter in mid‑2025, growth re‑accelerated into the high teens. The company’s gross income expanded in lockstep, from $26.7 billion to $61.2 billion over the same period, with the gross profit margin holding exceptionally steady at 71.07% in the most recent quarter – a sign of stable pricing and limited cost pressures despite surging volumes. Operating leverage is evident in selling, general and administrative (SG&A) expenses, which grew at a much slower pace (12–16% sequentially) than revenue, allowing pretax income to climb from $21.9 billion to $69.9 billion. Consequently, the pretax margin reached 65.5% in April 2026, and net income (after tax) soared from $18.8 billion to $58.3 billion, translating into a net margin of 55.6%. Diluted earnings per share rose from $0.76 to $2.39, helped also by a modest reduction in share count. Notably, the company consistently recorded negative “unusual expense” (i.e., gains or reversals of provisions), which added to bottom‑line results, while interest expense remained negligible.

Looking at the annual picture for the five fiscal years ending in January 2026 (labelled 2022 through 2026), the transformation is even more dramatic. Revenue was essentially flat from 2022 ($26.9 billion) to 2023 ($27.0 billion), but then exploded: $60.9 billion in 2024 (+125.9%), $130.5 billion in 2025 (+114.2%), and $215.9 billion in 2026 (+65.5%). The slowdown in the growth rate (from over 100% to 65%) is natural as the base expands, but absolute dollar increases remain massive – nearly $85 billion more revenue in 2026 than in 2025. Gross profit margin improved sharply from about 57% in 2023 (a trough year) to over 71% in 2026, reflecting the shift toward high‑margin data center AI products and away from lower‑margin legacy segments. Operating expenses (SG&A), which include a rapidly growing R&D budget ($5.3 billion in 2022 to $18.5 billion in 2026), increased at a much slower rate than revenue, driving extraordinary operating leverage. As a result, EBITDA rose from $11.2 billion in 2022 to $133.2 billion in 2026, and net income surged from $9.75 billion to $120.07 billion. The net margin widened from 36% (2022) to a stunning 55.6% in both 2025 and 2026, despite a temporary dip in 2023 when margins fell to 16% due to inventory adjustments and weaker gaming demand. Diluted EPS followed the same trajectory – $0.38 (2022), $0.17 (2023), then $1.19, $2.94, and $4.90 in 2026. The company has also been reducing its share count through buybacks (basic shares outstanding fell from 24.96 million in 2022 to 24.36 million in 2026), further boosting per‑share metrics.

Several themes deserve discussion. 

1. First, NVIDIA’s financial performance is now structurally different from any traditional semiconductor company – its net income alone exceeds the total revenue of most large tech firms. 
2. Second, the combination of 71% gross margins and 55%+ net margins is typically found only in software or platform companies, underscoring the value of NVIDIA’s compute ecosystem and the pricing power of its AI accelerators. 
3. Third, the negative “unusual expense” in every recent period (ranging from –$63 million to –$2.6 billion quarterly) suggests recurring non‑operating gains, possibly from investments or legal settlements, which provide a small but consistent tailwind. 
4. Fourth, interest expense has remained flat at around $250 million annually despite higher cash balances, meaning NVIDIA carries almost no net debt. 
5. Finally, the sequential growth rate in the latest quarter (19.8%) is still extremely robust but has moderated from the 22% peak in October 2025. Investors will watch whether this deceleration continues as competitors (AMD, custom ASICs) gain traction and as large cloud customers digest massive AI chip purchases. 

Nevertheless, the income statements paint a picture of a company executing exceptionally well on a once‑in‑a‑generation technology shift, with profit growth far outpacing revenue growth and operational efficiency reaching levels few corporations ever achieve.