Grammarly vs Microsoft: Revenue, Profit and Business Model
Grammarly reported $700M of revenue in FY2025 and — of net income. Microsoft reported $331.8B of revenue in FY2026 and $133.7B of net income.
Latest financial snapshot
Financial summary
Grammarly
Grammarly is private and does not publish audited financial statements. On May 29, 2025, while announcing $1 billion in nondilutive financing from General Catalyst, the company said it had more than $700 million in annual revenue and more than 40 million daily users. The General Catalyst money was structured as capital repaid from revenue generated by the sales and marketing it funds, not as new equity, so the company's last equity valuation is still $13 billion from the November 2021 round led by Baillie Gifford and BlackRock funds. The company was profitable and bootstrapped from 2009 until its first venture round of $110 million in 2017, then raised $90 million in 2019 at a valuation above $1 billion. It has not filed for an IPO.
Microsoft
Microsoft's FY2026 revenue rose 17.8% to $331.8 billion, operating income rose 21% to $155.2 billion, and GAAP net income rose 31% to $133.7 billion. Fourth-quarter revenue was $90.0 billion (up 18%) with net income of $35.8 billion, helped by a $3.2 billion gain on its Anthropic investment. Microsoft Cloud revenue reached $59.3 billion in Q4, up 27%. The main pressure point is capital intensity: AI data center spending has pushed free cash flow growth well below earnings growth.
Revenue and profit by year
Grammarly
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $700M | — | 0.0% | — | Source |
Microsoft
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $331.8B | $133.7B | 40.3% | +17.8% | Source |
| FY2025 | $281.7B | $101.8B | 36.1% | +14.9% | Source |
| FY2024 | $245.1B | $88.1B | 36.0% | +15.7% | Source |
| FY2023 | $211.9B | $72.4B | 34.1% | +6.9% | Source |
| FY2022 | $198.3B | $72.7B | 36.7% | +18.0% | Source |
| FY2021 | $168.1B | $61.3B | 36.5% | +17.5% | Source |
| FY2020 | $143B | $44.3B | 31.0% | +13.6% | Source |
| FY2019 | $125.8B | $39.2B | 31.2% | +14.0% | Source |
| FY2018 | $110.4B | $16.6B | 15.0% | +14.3% | Source |
| FY2017 | $96.6B | $25.5B | 26.4% | — | Source |
Where the revenue comes from
Grammarly
- Individual subscriptions
Not disclosed
Monthly or annual Grammarly Pro plans bought by individuals.
- Business and enterprise plans
Not disclosed
Per-seat team, business and enterprise contracts, plus suite plans that include Superhuman Docs, Mail and Go.
- Education licenses
Not disclosed
Institutional plans for schools and universities.
Microsoft
- Productivity And Business ProcessesMajor
Office, Microsoft 365, LinkedIn, Dynamics, and related cloud services.
- Intelligent CloudMajor
Azure, server products, enterprise services, and cloud infrastructure.
- More Personal ComputingMajor
Windows, devices, gaming, search, and advertising.
- AI Services And CopilotsGrowth
AI features and model-powered services embedded across Azure, Microsoft 365, GitHub, security, and developer tools.
Business model and strategy
Grammarly
How it makes money
Grammarly runs a freemium subscription model. The free browser extension and apps give basic spelling and grammar fixes and pull in tens of millions of users.
Growth strategy
Grammarly's strategy since 2023 has been to move from correcting text to doing work for the user. It launched GrammarlyGO generative features in 2023. It agreed to acquire Coda in December 2024 and made Coda co-founder Shishir Mehrotra CEO.
Competitive advantage
Grammarly's main advantage is distribution. It runs inside more than 1 million apps and websites through one extension, so users get suggestions in Gmail, Slack, Google Docs, Word or a CRM without copying text into a chatbot. That reach, which the company calls its in-app 'rails', is what Superhuman Go now uses to deliver its own and partner AI agents.
Microsoft
How it makes money
Microsoft reports three segments. Intelligent Cloud covers Azure, SQL Server, Windows Server, GitHub, Nuance, and enterprise services; server products and cloud services alone brought in $129.4 billion in FY2026, and Azure passed $100 billion in annual revenue for the first time.
Growth strategy
Microsoft's growth plan centers on AI capacity and AI subscriptions. It is spending heavily on data centers and chips to meet Azure demand that management says remains capacity constrained, and it is selling Microsoft 365 Copilot as a paid add-on, which passed 30 million paid seats by the end of FY2026.
Competitive advantage
Microsoft's main advantage is distribution inside enterprises. Identity (Entra), email and documents (Microsoft 365), collaboration (Teams), developer tools (GitHub, Visual Studio), and cloud infrastructure (Azure) are often bought together, which raises switching costs and lets Microsoft attach new products such as Copilot to existing contracts.
Questions about Grammarly vs Microsoft
Which company has higher revenue — Grammarly Inc. or Microsoft Corporation?
Grammarly Inc. reported $700.0M (FY2025), while Microsoft Corporation reported $331.8B (FY2026). By last reported revenue, Microsoft Corporation is the larger business, with Grammarly Inc. reporting a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of Grammarly Inc. vs Microsoft Corporation?
Microsoft Corporation has a market capitalisation of $3.83T. A public market cap figure for Grammarly Inc. was not available (it may be privately held).
Which is more financially efficient — Grammarly Inc. or Microsoft Corporation?
Grammarly Inc. generates $700k / employee in revenue per employee, while Microsoft Corporation generates $1.49M / employee. Microsoft Corporation shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Grammarly Inc. and Microsoft Corporation make money?
Grammarly Inc. and Microsoft Corporation generate revenue in fundamentally different ways. Grammarly Inc.: Grammarly runs a freemium subscription model. Microsoft Corporation: Microsoft reports three segments.
Is Grammarly Inc. bigger than Microsoft Corporation?
By last reported revenue, Microsoft Corporation ($331.8B (FY2026)) is the larger company compared to Grammarly Inc. ($700.0M (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Grammarly vs Microsoft overview