Learn the stock market › Read an earnings report › Lesson 1 of 7
A quarterly report in five minutes
What is in a report
A US company files a quarterly report, Form 10-Q, for each of the first three quarters of its fiscal year, and an annual report, Form 10-K, for the full year. Most also publish a shorter earnings release with the headline numbers. Either way the core is three tables: the income statement shows what the company sold and earned, the balance sheet what it owns and owes, and the cash flow statement what money came in and went out. Notes at the back explain single items.
Five lines at Microsoft
Here is Microsoft's latest quarter, the one that ended in September 2026, next to the same quarter a year earlier.
| $ million | Sep 2026 | Sep 2025 | Change |
|---|---|---|---|
| Revenue | 92,279 | 77,673 | +19% |
| Operating income | 45,915 | 37,961 | +21% |
| Operating margin | 49.8% | 48.9% | |
| Net income | 36,629 | 27,747 | +32% |
| Cash from operations | 58,000 | 45,057 | +29% |
Revenue is everything the company sold. It changed +19% in a year.
Operating income is what the business itself earned before interest and tax, here $45.9 billion. It changed +21%.
Operating margin is operating income as a share of revenue: 49.8%, against 48.9% a year earlier. It shows whether the company keeps more or less of each dollar it sells. The lesson on margins goes further.
Net income is the last line of the income statement. It changed +32%.
Cash from operations, $58.0 billion, is the money that actually came in. Why it differs from profit is the subject of the lesson on cash flow.
Compare with the same quarter a year earlier
Many businesses sell more in some seasons than in others. That is why reports compare a quarter with the same quarter a year before, not with the quarter just before it. A retailer that sells most before the holidays would otherwise look like it grows every fall and shrinks every spring.
Companies that sell abroad are also affected by exchange rates, so many reports show growth in constant currency, and without businesses bought during the year, often called organic growth.
What the tables do not show
The market does not only compare the numbers with last year. It also compares them with what it expected, which is why a stock can fall on a report that looks good. Lesson 5 shows how often that happens, and the lesson on earnings day how much stocks usually move. What management says about the future can matter as much as the quarter that has passed, see lesson 6.
Test yourself
A retailer sells most during the holiday season. Which comparison tells you most about its fourth quarter?
Microsoft's latest figures are on its stock page.
Sources
- US Securities and Exchange Commission, 17 CFR 240.13a-13, Quarterly reports on Form 10-Q, read on 5 November 2026.