Microsoft: Contracted Revenue

Metric

RPO · Commercial only

Contracted balance

$678B, +84% year over year

Denominator

Fiscal 2026 revenue of $331.8bn for the twelve months ended June 30, 2026, as reported. The period end is a fiscal year end, so the reported annual figure is the trailing twelve months with no arithmetic applied.

Coverage

2.04x (scopes do not match, see below)

Scope

Commercial remaining performance obligation: Microsoft's commercial business only, which excludes consumer revenue such as Windows OEM, gaming and devices. Microsoft does not publish a matching commercial revenue line, so the coverage ratio here is measured against total company revenue and reads lower than the true commercial ratio.

Duration

CFO Amy Hood put the weighted average duration at 2.3 years including OpenAI on the FY26 Q4 call, with roughly 30% of the balance due to be recognised within 12 months. The near-term slice grew 37% year over year while the portion due beyond 12 months more than doubled, so the backlog is lengthening as it grows.

Concentration · largest customer OpenAI

Microsoft disclosed RPO growth of 25% excluding OpenAI, and said all sequential growth came from customers outside the frontier model companies. The gap between 84% and 25% is the clearest concentration disclosure any hyperscaler has given.

Notes

The disclosure that reset how the market reads AI capex: $678bn of signed commercial commitments, up 84%, released into a fortnight of scepticism about spending without proof of demand, and the stock rose about 8%. Microsoft is the only company in this table disclosing all three of a duration, a 12-month split and an ex largest customer growth rate, which is why it is the benchmark for what a good disclosure looks like rather than for the size of the number.

Sources: company filing or release · company filing or release · tier-1 report