Apple vs. Microsoft: how they make money

• Indirect channels · 60.0% of revenueThird-party cellular network carriers and other resellers, which sell Apple's products and certain of its services.
• Direct channels · 40.0% of revenueConsumers, businesses, schools and governments buying through Apple's retail and online stores and its direct sales force.
• Search and other licensing partnersGoogle and other companies pay Apple to offer their search services on its platforms. Apple does not disclose the amount.

• Azure customers · 30.7% of revenueOrganizations renting computing, storage, data and AI services, charged by use. OpenAI is one: it contracted in October 2025 to buy an incremental $250 billion of Azure.
• Microsoft 365 cloud subscribers · 30.2% of revenueOrganizations and households paying for Office, security and Copilot, and developers paying for GitHub cloud.
• License buyers · 11.2% of revenueOrganizations and consumers buying software installed on their own machines.
• Advertisers · 7.5% of revenueBrands paying for ads on Bing, MSN and LinkedIn; this line also holds LinkedIn Premium subscriptions.
• Gamers · 6.6% of revenuePeople buying games, Game Pass and consoles; this line also holds XBOX ads.
• Industry solutions customers · 6.1% of revenueOrganizations paying for Dynamics 365, LinkedIn recruiting and sales tools, and healthcare cloud services.
• PC makers and device buyers · 5.1% of revenuePC makers licensing Windows to pre-install, and buyers of Surface devices.
• Support and training customers · 2.5% of revenueOrganizations paying for product support, consulting and training.

FY2025

FY2026, recast to the two FY2027 segments

Debt

$84.3B

Cash and investments

$146.5B

On Jun 27, 2026.

At Jun 27, 2026 Apple's cash and marketable securities exceeded its debt by $62.2 billion; at Sep 27, 2025 the gap was $33.8 billion.

Debt

$35.5B

Cash and investments

$64.5B

On Sep 30, 2026.

At Sep 30, 2026 Microsoft's cash and short-term investments exceeded its debt by $29.0 billion, before counting $98.5 billion of lease liabilities.

• One class of shares.
• Officers and directors as a group: 0.1% of shares (as of Jan 2, 2026).
• The Vanguard Group: 9.6% (as of Jan 2, 2026).
• Vanguard Capital Management: 7.5% (as of Mar 31, 2026).
• BlackRock, Inc.: 7.1% (as of Jan 2, 2026).

• One class of shares.
• Officers and directors as a group: 0.0% of shares (as of Sep 30, 2026).
• Vanguard Capital Management LLC: 7.5% (as of Apr 30, 2026).
• BlackRock, Inc.: 7.3% (as of Feb 13, 2024).

• Component shortages and rising costs (commodity costs)Apple's Jul 31, 2026 10-Q reports supply constraints and rising costs for advanced chips, NAND storage and DRAM memory. It says Apple "expects these trends to intensify". It says price increases may not offset this and may reduce demand. Inventories rose to $11.1 billion at Jun 27, 2026 from $5.7 billion at Sep 27, 2025.
• Tariffs and refunds (regulation)A Feb 20, 2026 Supreme Court ruling struck down certain tariffs. Apple said refunds added about 2 points to Q3 FY2026 gross margin and $0.11 to diluted EPS of $2.02. New Section 301 tariffs followed, and Section 232 semiconductor measures remain possible.
• Computing capacity and research costs (technology)R&D was 10.7% of net sales in Q3 FY2026, up from 9.4% a year earlier. Apple's 10-Q says it relies on third-party cloud providers for computing needs and may be unable to secure enough capacity.

• Building data centers takes much of the cash (execution)In the 12 months to Sep 30, 2026, additions to property and equipment were $135.9 billion against $195.9 billion of cash from operations. Another $26.5 billion of purchases sat unpaid at Sep 30, 2026. Microsoft's 10-K says revenue from this spending may not arrive in the expected time or amount.
• Leases and commitments are larger than debt (debt)At Sep 30, 2026 debt was $35.5 billion, finance leases $71.0 billion and operating leases $27.5 billion. Leases not yet started were $364.6 billion. Purchase commitments were $194.1 billion at Jun 30, 2026. The CFO said on Jul 29, 2026 that longer data center lives shift more future leases to operating leases, which capital expenditures do not count.
• OpenAI gains and losses swing net income (other)Other income included a $10.0 billion pre-tax OpenAI net gain in Q2 FY2026 and a $4.1 billion net loss in Q1 FY2026. That loss is why Q1 FY2027 net income rose 32% while operating income rose 21%. Microsoft's interest fell to about 24% as-converted at Sep 30, 2026, from about 27% at Mar 31, 2026.
• Limits on chips, power and data center supply (execution)Microsoft says its data centers depend on land, energy, networking supplies and servers, and some components have very few qualified suppliers. The CFO said on Oct 28, 2026 that some third-party capacity deliveries were delayed.
• Competition, including from partners (competition)Microsoft's 10-K calls AI highly competitive and fast-moving. It says its AI products compete with those of very large cloud companies and others, many of which are also current or potential partners. In October 2025 Microsoft gave up its right of first refusal to be OpenAI's compute provider.