Changes in unearned revenue were as follows:
| --- | --- | --- | --- | | (In millions) | | | | | Year Ended June 30, 2025 | | | | | Balance, beginning of period | $ | 60,184 | | | Deferral of revenue | | 186,957 | | | Recognition of unearned revenue | | ( 179,876 | ) | | Balance, end of period | $ | 67,265 | |
Revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, was $ 375 billion as of June 30, 2025, of which $ 368 billion is related to the commercial portion of revenue. We expect to recognize approximately 40 % of our total company remaining performance obligation revenue over the next 12 months and the remainder thereafter.
NOTE 13 — LEASES
We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. Our leases have remaining lease terms of less than 1 year to 20 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.
The components of lease expense were as follows:
(In millions)
Year Ended June 30, ..................... 2025 / 2025 / 2024 / 2023
Operating lease cost .................... $ / 5,524 / $ / 3,555 / $ / 2,875
Finance lease cost:
Amortization of right-of-use assets ..... $ / 3,408 / $ / 1,800 / $ / 1,352
Interest on lease liabilities ........... 1,417 / 734 / 501
Total finance lease cost ................ $ / 4,825 / $ / 2,534 / $ / 1,853
Supplemental cash flow information related to leases was as follows:
(In millions)
Year Ended June 30, ..................... 2025 / 2025 / 2024 / 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases ... $ / 4,931 / $ / 3,550 / $ / 2,706
Operating cash flows from finance leases ... 1,372 / 734 / 501
Financing cash flows from finance leases ... 2,283 / 1,286 / 1,056
Right-of-use assets obtained in exchange for lease obligations:
Operating leases ........................ 7,826 / 6,703 / 3,514
Finance leases .......................... 20,511 / 11,633 / 3,128
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PART II