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Microsoft FY25 free cash flow walk

By Oliver Wakefield-Smith, Founder, Digital Signet. Verified against primary filings; see /sources.
MSFTMicrosoftFY25Investor relationsSEC EDGAR 10-K index

The walk (FY24 reported figures)

Net cash provided by operating activities$118,548
Less: additions to property and equipment($44,477)
FCF (Standard)$74,071

USD millions.

AI-CapEx share

Microsoft does not publish AI-only CapEx as a discrete line. Disclosure language in the MD&A attributes the bulk of FY24 increase to AI and cloud infrastructure. The CapEx-to-OCF ratio rose from roughly 24% in FY22 to roughly 38% in FY24 - the largest jump in the company's post-2014 history.

FCF margin

Revenue FY24 was approximately $245B; FCF margin equals 74.1 / 245 = 30.2%. The AI-CapEx ramp will compress this in FY25-FY26 even as revenue grows; treat flat-to-declining FCF margin as the base case for the next two years.

See also