Microsoft (MSFT) risk factors, FY2025 10-K

Microsoft's FY2025 10-K, filed Jul 30, 2025, lists 17 risk factors in 5 groups. There is no earlier 10-K to compare against, so the most company-specific risks are listed below.

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Risk factors listed
175 groups
Section length
10k wordsItem 1A

Microsoft's biggest risks in the FY2025 10-K

  • Microsoft faces intense competition across platforms, cloud services, and AI development, alongside major cybersecurity and intellectual property protection challenges.

The risks most specific to Microsoft

  • STRATEGIC AND COMPETITIVE RISKS

    Companies compete with us based on a growing variety of business models

    The company faces growing competition across cloud-based services and computing devices as pricing and delivery models evolve.

  • STRATEGIC AND COMPETITIVE RISKS

    Other competitors develop and offer free applications, online services, and content, and make money by selling third-party advertising. Advertising revenue funds development of products and services these competitors provide to users at little or no cost, competing directly with our revenue-generating products

    Competitors offering free ad-supported applications, open source software, and open AI models directly rival Microsoft's revenue-generating products.

  • STRATEGIC AND COMPETITIVE RISKS

    The competitive pressures described above may cause decreased sales volumes, price reductions, and/or increased operating costs, such as for research and development, marketing, and sales incentives, which could adversely affect our financial condition and results of operations

    Building and maintaining infrastructure for cloud-based and AI services incurs significant costs that reduce operating margins.

  • RISKS RELATING TO THE EVOLUTION OF OUR BUSINESS

    Security of our information technology

    Threat actors including nation-states and cybercriminal groups continuously attack the company's internal infrastructure and customers.

  • RISKS RELATING TO THE EVOLUTION OF OUR BUSINESS

    Security of our products, services, devices, and customers’ data

    Product and service security is a critical challenge and a decisive factor in customer purchases across cloud and on-premises environments.

  • RISKS RELATING TO THE EVOLUTION OF OUR BUSINESS

    Other digital safety abuses

    Consumer and enterprise services may be used to disseminate harmful or illegal content in violation of terms or law.

  • LEGAL, REGULATORY, AND LITIGATION RISKS

    INTELLECTUAL PROPERTY RISKS

    Combating unlicensed copying and protecting software, source code, and intellectual property globally presents significant difficulties.

All 17 risk factors

Headings as the filing states them, in filing order.

STRATEGIC AND COMPETITIVE RISKS

  1. 01Competition in the technology sector
  2. 02Competition among platform-based ecosystems
  3. 03Companies compete with us based on a growing variety of business models
  4. 04Other competitors develop and offer free applications, online services, and content, and make money by selling third-party advertising. Advertising revenue funds development of products and services these competitors provide to users at little or no cost, competing directly with our revenue-generating products
  5. 05The competitive pressures described above may cause decreased sales volumes, price reductions, and/or increased operating costs, such as for research and development, marketing, and sales incentives, which could adversely affect our financial condition and results of operations
  6. 06Continuing to bring to market compelling cloud-based and AI services and products that generate increasing traffic and market share
  7. 07Continuing to enhance the attractiveness of our cloud platforms to third-party developers
  8. 08Making our suite of cloud-based services platform-agnostic, available on a wide range of devices and ecosystems, including those of our competitors

RISKS RELATING TO THE EVOLUTION OF OUR BUSINESS

  1. 09Security of our information technology
  2. 10Security of our products, services, devices, and customers’ data
  3. 11Item 1A Development and deployment of defensive measures
  4. 12Advertising, professional, marketplace, and gaming platform abuses
  5. 13Other digital safety abuses

LEGAL, REGULATORY, AND LITIGATION RISKS

  1. 14INTELLECTUAL PROPERTY RISKS

GENERAL RISKS

  1. 15Data security breaches, cybersecurity incidents, responsible AI failures, compliance failures, or actions of partners or individual employees
  2. 16Social media may increase the likelihood, speed, and magnitude of negative brand events. If our brands or reputation are damaged, it could adversely affect our business, results of operations, or ability to attract the most highly qualified employees
  3. 17Challenging economic conditions also may impair the ability of our customers to pay for products and services they have purchased. As a result, allowances for doubtful accounts and write-offs of accounts receivable may increase

Other Microsoft 10-Ks

  • FY2026 10-K risk factors
    20 risks6 new3 dropped8 reworded

    AI expansion now centers on accelerated datacenter, component, energy, and capital commitments before revenue.

    Filed Jul 29, 2026

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.