Both Apple and Microsoft are highly profitable mega-cap franchises, but they differ in trajectory and margin structure. Apple generated FY2025 revenue of $416.2B [AAPL:Q3] and net income of $112.0B [AAPL:Q7], implying a net margin of roughly 26.9%, while Microsoft posted FY2025 revenue of $281.7B [MSFT:Q3] and net income of $101.8B [MSFT:Q7], implying a net margin of approximately 36.1%—meaningfully higher than Apple's. On gross profit, Apple reached $195.2B [AAPL:Q15] versus Microsoft's $193.9B [MSFT:Q15], nearly identical in absolute dollars despite Apple's much larger revenue base, reflecting Apple's lower gross margin (~47%) compared to Microsoft's (~69%). Operating income tells a similar story: Apple's $133.1B [AAPL:Q11] versus Microsoft's $128.5B [MSFT:Q11] are close in absolute terms, but Microsoft's operating margin (~45.6%) far exceeds Apple's (~32.0%).
On growth trajectory, Microsoft expanded revenue from $198.3B in FY2022 [MSFT:Q0] to $281.7B in FY2025 [MSFT:Q3], a ~42% increase driven by cloud and AI tailwinds, while Apple's revenue grew more modestly from $394.3B [AAPL:Q0] to $416.2B [AAPL:Q3], roughly 5.5% over the same span. Net income trends at both companies were less linear than headline figures suggest: Microsoft's net income was essentially flat between FY2022 and FY2023 ($72.7B [MSFT:Q4] to approximately $72.4B) before accelerating sharply into FY2025 [MSFT:Q7], a pattern that broadly mirrors Apple's own experience. Apple's net income declined for three consecutive years from FY2022 through FY2024—from approximately $99.8B down to $93.7B [AAPL:Q6]—before recovering to $112.0B [AAPL:Q7] in FY2025, a rebound that reflects a multi-year trough rather than a single down year. Overall, Microsoft leads on margin quality and growth rate, while Apple leads on absolute revenue scale.
AAPL: Apple is an exceptionally profitable business at scale, with FY2025 revenue of $416.2B [AAPL:Q3] and net income of $112.0B [AAPL:Q7]. That net income recovery is notable but follows a prolonged three-year decline from the FY2022 peak of ~$99.8B through the FY2024 low of $93.7B [AAPL:Q6]. Its gross margin of roughly 47% (gross profit $195.2B [AAPL:Q15]) and operating margin of ~32% reflect a hardware-heavy mix that structurally constrains margins relative to pure-software peers, and top-line growth has been modest over the past three fiscal years.
MSFT: Microsoft demonstrates superior margin quality and a faster growth trajectory, with FY2025 revenue expanding to $281.7B [MSFT:Q3] from $198.3B in FY2022 [MSFT:Q0] and net income reaching $101.8B [MSFT:Q7], implying a net margin of ~36%. Its gross profit of $193.9B [MSFT:Q15] on that revenue base reflects a gross margin of approximately 69%, and operating income of $128.5B [MSFT:Q11] yields an operating margin near 45.6%, both well above Apple's comparable figures. That said, Microsoft's net income path was not uniformly smooth—earnings were roughly flat in the FY2022–FY2023 period before accelerating sharply—so the margin advantage is real but the compounding trajectory is somewhat back-loaded.
Note: The question asked specifically about free cash flow margin; the available axis data covers income-statement profitability metrics. A direct free cash flow margin comparison would require cash flow statement data not reflected in the comparisons above.