Microsoft (NASDAQ: MSFT) is preparing to send shareholders its next quarterly dividend payment of $0.91 per share, declared on June 10 and payable on September 10.
For dividend investors, however, the more consequential event this month is the board’s expected announcement of its annual dividend increase, which has historically come in September.
Microsoft has now raised its quarterly dividend for 16 consecutive years, with every single increase announced during September, forming one of the most consistent dividend growth records among large-cap technology companies.
The most recent increase came on September 15, 2025, when the board lifted the quarterly payment from $0.83 to $0.91 per share, representing a gain of just under 10%.
Looking at the last six annual increases, the percentages were 9.8%, 10.7%, 9.7%, 10.3%, 10.7%, and 9.6%, all falling within a narrow band between 9.6% and 10.7%.
Over the longer term, the quarterly dividend has grown from $0.36 at the end of 2015 to $0.91 at the end of 2025, equating to roughly a 9.7% annual compound growth rate across that decade.
Applying that historical band to the current $0.91 payment suggests the next quarterly dividend would land between approximately $1.00 and $1.01, pointing to an annualised payment of around $4.00.
The key concern for dividend growth watchers is Microsoft’s surging capital expenditure, with the company allocating $115.9 billion to property and equipment in fiscal 2026, an 80% jump from the prior year as it builds out artificial intelligence data center capacity.
Despite a 34% rise in operating cash flow to $182.9 billion, only around $67 billion in free cash flow remained after capital expenditures in fiscal 2026, down from approximately $72 billion the year before.
Earnings growth, however, is running well ahead of dividend growth, with fiscal 2026 revenue rising 18% to $331.8 billion and Azure revenue crossing $100 billion for the year while climbing 41%.
Net income of $133.7 billion came in 31% above the prior year, providing a substantial and expanding cushion for the dividend commitment.
At $0.91 per quarter across approximately 7.4 billion shares, Microsoft pays out around $27 billion annually, representing about 15% of operating cash flow and roughly 20% of the $17.95 per share the company earned in fiscal 2026.
A 10% dividend increase would add approximately $2.7 billion per year to that total, a meaningful but manageable addition given the current earnings trajectory.
Even with free cash flow squeezed by data center construction, the figure still covers the annual dividend obligation more than twice over, limiting the financial risk of maintaining the growth streak.
At a share price of approximately $505, Microsoft’s dividend yield sits at around 0.7%, meaning the income component remains a secondary consideration compared to the capital growth story for most shareholders.
The board has not scheduled or confirmed any announcement, and the pattern, while remarkably stable, remains a pattern rather than a guarantee.
If any factor nudges the increase toward the lower end of the historical range, the AI infrastructure buildout is the most likely culprit, though even a 9% increase would comfortably preserve the 16-year streak.
The dividend’s real significance lies less in its yield and more in what consistent annual increases signal about management’s confidence in long-term cash generation, including through the current capital-intensive AI expansion cycle.
