Market-Implied DCF · MSFT
Market-Implied DCF — full build
The full reverse-DCF build behind the current price: per-year projection, line-item growth ranges, raw model inputs, and the historical UFCF that seeds it.
Implied FCF growth
18.04%
WACC
10.44%
Terminal growth
2.50%
Total EV (PV)
$2645.97B
A · Projection & terminal value
Per-year unlevered FCF, discount factors, and the terminal-value bridge
| Year | Projected UFCF | Discount factor | Discounted UFCF |
|---|---|---|---|
| 1 | $70.45B | 1.1044 | $63.79B |
| 2 | $83.16B | 1.2196 | $68.18B |
| 3 | $98.16B | 1.3470 | $72.87B |
| 4 | $115.86B | 1.4875 | $77.89B |
| 5 | $136.75B | 1.6428 | $83.24B |
| 6 | $161.42B | 1.8143 | $88.97B |
| 7 | $190.53B | 2.0036 | $95.09B |
| 8 | $224.89B | 2.2128 | $101.63B |
| 9 | $265.45B | 2.4437 | $108.63B |
| 10 | $313.33B | 2.6988 | $116.10B |
| Terminal FCF | $379.08B | ||
| Terminal value | $4775.75B | ||
| Discounted terminal value | $1769.57B | ||
| Total enterprise value (PV) | $2645.97B | ||
| Enterprise value anchor | $2645.83B | ||
B · Line-item growth ranges
Low / mid / high annual growth implied for each line item
| Line item | Low % | Mid % | High % |
|---|---|---|---|
| Revenue | 12.3% | 16.4% | 18.3% |
| Cost of revenue | 11.9% | 17.3% | 19.6% |
| Operating expense | 5.1% | 8.4% | 13.3% |
| D&A | 2.6% | 27.6% | 63.7% |
| Capex | 21.9% | 38.3% | 55.8% |
C · Raw model inputs
Baseline model assumptions
WACC
10.44%
Terminal growth
2.50%
Cost of equity
10.58%
Cost of debt
4.96%
Risk-free rate
4.40%
Effective tax rate
18.67%
Beta
1.10
Projection years
—
Shares outstanding
7428430000
Market cap
$2620.97B
Enterprise value (anchor)
$2645.83B
Total debt
$56.97B
Cash & equivalents
$32.10B
Preferred stock
$0.00
Minority interest
$0.00
Weight · equity
97.9%
Weight · debt
2.1%
Weight · preferred
0.0%
D · Historical UFCF (quarterly)
Statement-built unlevered free cash flow by quarter
| Period | Revenue | Cost of revenue | Operating expense | EBIT | D&A | Capex | UFCF |
|---|---|---|---|---|---|---|---|
| 2020Q4 | $38.03B | $12.34B | $12.29B | $13.41B | $3.50B | $4.74B | $13.63B |
| 2021Q1 | $37.15B | $11.00B | $10.28B | $15.88B | $2.65B | $4.91B | $13.45B |
| 2021Q2 | $43.08B | $14.19B | $10.98B | $17.90B | $2.76B | $4.17B | $7.43B |
| 2021Q3 | $41.71B | $13.04B | $11.61B | $17.05B | $2.94B | $5.09B | $15.50B |
| 2021Q4 | $46.15B | $13.99B | $13.07B | $19.09B | $3.34B | $6.45B | $15.33B |
| 2022Q1 | $45.32B | $13.65B | $11.43B | $20.24B | $3.21B | $5.81B | $14.68B |
| 2022Q2 | $51.73B | $16.96B | $12.52B | $22.25B | $3.50B | $5.87B | $7.94B |
| 2022Q3 | $49.36B | $15.62B | $13.38B | $20.36B | $3.77B | $5.34B | $19.88B |
| 2022Q4 | $51.87B | $16.43B | $14.90B | $20.53B | $3.98B | $6.87B | $17.72B |
| 2023Q1 | $50.12B | $15.45B | $13.15B | $21.52B | $2.79B | $6.28B | $16.86B |
| 2023Q2 | $52.75B | $17.49B | $14.86B | $20.40B | $3.65B | $6.27B | $5.06B |
| 2023Q3 | $52.86B | $16.13B | $14.38B | $22.35B | $3.55B | $6.61B | $17.71B |
| 2023Q4 | $56.19B | $16.80B | $15.14B | $24.25B | $3.87B | $8.94B | $19.47B |
| 2024Q1 | $56.52B | $16.30B | $13.32B | $26.89B | $3.92B | $9.92B | $20.25B |
| 2024Q2 | $62.02B | $19.62B | $15.37B | $27.03B | $5.96B | $9.73B | $9.23B |
| 2024Q3 | $61.86B | $18.50B | $15.77B | $27.58B | $6.03B | $10.95B | $21.46B |
| 2024Q4 | $64.73B | $19.68B | $17.12B | $27.93B | $6.38B | $13.87B | $24.00B |
| 2025Q1 | $65.58B | $20.10B | $14.93B | $30.55B | $7.38B | $14.92B | $19.44B |
| 2025Q2 | $69.63B | $21.80B | $16.18B | $31.65B | $5.67B | $15.80B | $8.12B |
| 2025Q3 | $70.07B | $21.92B | $16.15B | $32.00B | $8.74B | $16.75B | $20.50B |
| 2025Q4 | $76.44B | $24.01B | $18.10B | $34.32B | $11.20B | $17.08B | $26.25B |
| 2026Q1 | $77.67B | $24.04B | $15.67B | $37.96B | $13.06B | $19.39B | $28.79B |
| 2026Q2 | $81.27B | $25.98B | $17.02B | $38.27B | $9.20B | $29.88B | $-1.45B |
| 2026Q3 | $82.89B | $26.83B | $17.66B | $38.40B | $10.17B | $30.88B | $15.25B |