What Is a Stock Buyback? How Share Repurchases Work and Where They Are Disclosed

A stock buyback, or share repurchase, is a company spending its own cash to buy back its shares, which reduces the number of shares held by outside investors.

A buyback is one of the two main ways a company returns cash to its shareholders, the other being a dividend. This page covers what a repurchase is, the four main ways companies carry one out, why an announced program is not the same as shares bought, where the numbers are disclosed in SEC filings (and what happened to the SEC's 2023 attempt to change that), the Rule 10b-18 safe harbor, the 1 percent excise tax, a worked example of the effect on share count and earnings per share, how a buyback differs from a dividend, and where Kresmion shows repurchase figures. It is descriptive throughout.

What a buyback is

When a company buys its own shares, it pays cash out of the business and takes those shares out of circulation. It can hold them as treasury stock or retire them; either way they are no longer outstanding, carry no vote and receive no dividend. The shareholders who sold get cash. The shareholders who did not sell now own a slightly larger fraction of a company that has slightly less cash.

The money comes from the same place as any other use of cash: operating cash flow, cash already on the balance sheet, or borrowing. On the cash flow statement a buyback appears as a cash outflow in the financing section, next to dividends paid and debt repaid, and it is one of the uses that free cash flow is often compared against.

How companies buy back stock

The SEC's 2023 adopting release on repurchase disclosure lists the means companies use: open market purchases, tender offers, privately negotiated transactions and accelerated share repurchases. It also notes that most repurchases are carried out over time through open market purchases.

Open market repurchases. The company, through a broker, buys its shares on the exchange over weeks or months, like any other buyer. It decides how much to buy and when, within the limits of its program, and it can slow down or stop. Some companies set the purchases up in advance under a Rule 10b5-1 trading plan so they can continue during periods when insiders hold material information.

Fixed-price tender offer. The company offers to buy a stated number of shares at a stated price, usually above the market price, for a limited time. Under Rule 13e-4 an issuer tender offer must stay open for at least 20 business days, must be open to all holders of the class, and must pay every holder the same highest price. If more shares are tendered than the company will buy, it takes them pro rata, subject to limited exceptions such as odd lots of under 100 shares.

Dutch auction tender offer. A variant in which the company sets a price range rather than one price and asks holders to say the lowest price in that range at which they would sell. The company then picks the lowest single price that lets it buy the number of shares it is seeking, and every share it accepts is bought at that one price, which the all-holders and best-price rules require. Shares offered above the clearing price are returned.

Accelerated share repurchase (ASR). The company pays a bank a fixed sum up front and receives a large part of the shares at once, which cuts the share count immediately. The bank, which borrowed those shares, buys in the market over the following months to cover its position. At the end, the final number of shares is settled against the average market price over that period, less any agreed discount, and either the bank delivers more shares or the company delivers shares or cash to the bank. ASRs show up in filings as an initial delivery, a final settlement and a final average price per share.

Privately negotiated purchases from a single large holder also count as repurchases and appear in the same disclosure table.

An announced program is not shares bought

A board authorisation sets a ceiling, not a commitment. The SEC's 2023 release describes the usual pattern: companies disclose a repurchase plan or program when the board authorises it, carry it out over time, and are not required to say on which dates they will buy, and they typically do not. A program can run for years, be paused, or never be completed.

Microsoft's 10-K for the fiscal year ended 30 June 2026 shows the gap. Its board approved a $60.0 billion program on 14 September 2021; purchases under it began in November 2021 and it was completed in April 2025. The board approved a second $60.0 billion program on 16 September 2024, which did not start until April 2025, once the first was finished. The 10-K says the second program has no expiration date and may be terminated at any time, and that $40.6 billion of it remained at 30 June 2026. So in roughly 15 months, $19.4 billion of the $60.0 billion was used. A headline about a "$60 billion buyback" in September 2024 described an authorisation; the shares were bought over the following years.

Where the numbers are disclosed

The issuer purchases table (Item 703). Regulation S-K Item 703 requires a table of the company's own purchases, month by month, with four columns: (a) the total number of shares purchased, (b) the average price paid per share, (c) the number bought as part of publicly announced plans or programs, and (d) the maximum number of shares, or the approximate dollar value, that may still be bought under those programs. Footnotes give each program's announcement date, size and expiration date, and the number of shares bought outside a program, such as shares withheld to cover employee taxes.

• In a 10-Q, the table is in Part II, Item 2, covering each month of the quarter.
• In a 10-K, it is in Part II, Item 5, covering the months of the fourth fiscal quarter only, because the three 10-Qs covered the rest of the year. How to read a 10-K maps the other items.

Microsoft's fourth-quarter table for fiscal 2026 reads:

The columns check against each other: May's 3,559,509 shares at $416.81 come to about $1,484 million, and the remaining capacity fell by $1,483 million that month. All of the quarter's purchases were under the announced program, and the table excludes shares repurchased to settle employee tax withholding.

The financial statements. The cash paid appears on the cash flow statement, and the shares and their cost appear in the statement of stockholders' equity and the equity note. These do not always match the program table. Microsoft's equity note reports 36 million shares bought under its programs in fiscal 2026 for $16,719 million and separately $5.6 billion of shares repurchased to settle employee tax withholding when stock awards vested; its cash flow statement shows $22,271 million of common stock repurchased, close to the sum of the two.

The announcement. Form 8-K has no item dedicated to buybacks. A new authorisation is usually announced in a press release, which a company may file or furnish on an 8-K (for example under Item 8.01, Other Events, or Item 7.01, Regulation FD) or include in its earnings release under Item 2.02. How to read an 8-K covers those items.

The 2023 rule that was vacated. On 3 May 2023 the SEC adopted amendments that would have replaced the monthly table with daily repurchase data, filed quarterly by companies that file 10-Qs, plus a narrative on the objectives of each program and the process used to decide how much to buy. They took effect on 31 July 2023. On 19 December 2023 the US Court of Appeals for the Fifth Circuit vacated them, which, in the SEC's words, had the legal effect of reverting to the rules and forms that existed before. On 8 April 2024 the SEC published technical amendments removing the vacated text from the Code of Federal Regulations. As of October 2026, the Item 703 text in the eCFR is the monthly four-column table described above.

The rules that shape a buyback

Rule 10b-18, the safe harbor. A company buying its own stock could be accused of manipulating its price. Rule 10b-18 gives it a voluntary safe harbor from that charge, based on the manner, timing, price and volume of its open market purchases, if it meets four conditions every day:

1. One broker or dealer for all its purchases on a given day. 2. Timing. Not the opening trade of the day, and not in the last 10 minutes before the scheduled close for a stock with an average daily trading value of at least $1 million and a public float of at least $150 million, or the last 30 minutes for any other stock. 3. Price. No higher than the highest independent bid or the last independent trade, whichever is higher. 4. Volume. No more than 25 percent of the stock's average daily trading volume over the four calendar weeks before the week of purchase, except that once a week the company may make one block purchase instead.

Missing any one condition removes all of that day's purchases from the safe harbor, but the rule also says that no presumption of manipulation arises from purchases outside it. Purchases in a tender offer are not covered by Rule 10b-18; they follow the tender offer rules instead.

The 1 percent excise tax. The Inflation Reduction Act of 2022 added section 4501 to the Internal Revenue Code. It imposes a tax equal to 1 percent of the fair market value of stock a "covered corporation", a US corporation whose stock trades on an established securities market, repurchases during its taxable year, for repurchases after 31 December 2022. The amount taxed is reduced by the fair market value of stock the company issues in the same year, including shares issued to employees. There are exceptions, among them years in which repurchases total no more than $1 million, repurchases contributed to employee retirement or stock ownership plans, and repurchases treated as dividends for tax purposes. The tax is not deductible for income tax purposes (section 275). The Treasury published final regulations on the tax, effective 24 November 2025.

A hypothetical: a company repurchases $1,500 million of its stock in a year and issues $400 million of stock to employees. The tax base is $1,500 million minus $400 million, or $1,100 million, and the tax is 1 percent of that, $11 million.

A worked example: share count and EPS

Earnings per share divides profit by the weighted average number of shares, so a buyback changes the denominator. A hypothetical company, with every figure invented for illustration:

It spends $1,500 million to buy 25 million shares at $60, all on the first day of the year, so the weighted average count is 475 million for the whole year. If net income stays at $1,000 million, EPS rises from $2.00 to $2.11, about 5.3 percent, with no change in the business.

That assumes the cash cost nothing to spend. Suppose instead it had been earning 4 percent interest before a 21 percent tax: giving it up costs $1,500 million x 4% x (1 - 21%) = $47.4 million of after-tax income. Net income becomes $952.6 million and EPS $952.6 / 475 = $2.0055, a rise of about 0.3 percent. The arithmetic behind the difference is a comparison of yields: the stock's earnings yield at $60 is $2.00 / $60 = 3.33 percent, barely above the 3.16 percent after-tax yield on the cash, so the buyback adds only a little to EPS. A higher share price, or a higher interest rate, would turn the same purchase into a reduction. A buyback paid for with borrowed money works the same way, with the after-tax interest cost in place of the lost interest income.

Real share counts rarely fall by the full amount bought, because companies also issue shares, mostly to employees. Microsoft bought 36 million shares under its program in fiscal 2026, and its 10-K shows shares outstanding moving from 7,434 million to 7,427 million, because it issued 29 million over the same year. EPS is also a per-share measure of profit, not of value, so a rise from fewer shares says nothing by itself about whether the price paid for them was high or low; the P/E ratio page covers how price and earnings are compared.

Buybacks compared with dividends

Both move cash from the company to its owners, and both appear in the financing section of the cash flow statement. Microsoft's 10-K, for example, reports both in the same Item 5 section: the monthly repurchase table above and the dividends declared in the quarter.

Where Kresmion shows buybacks

Kresmion's public buybacks page, free with no account, shows one company at a time at /tools/buybacks/ followed by its ticker, with every figure read from the company's SEC XBRL filings. It shows the cash paid for repurchases of common stock per fiscal year and per quarter, a single quarter being derived from year-to-date figures when the filer reports only those; the shares tagged as repurchased; and the change in the cover-page share count beside them, with the remainder labelled as other changes such as issuance and stock awards. Program authorisations, remaining capacity and accelerated share repurchase facts appear only where the filer tags them in a form the SEC company facts service carries, which many do not, so an empty list there does not mean no program exists. Where a remaining-capacity figure is shown, check its as-of date: it is the last value the filer tagged in that form, which can be years old. The page does not parse the monthly Item 703 table; the month-by-month purchases and the remaining capacity in that table are read from the filing itself.

Honest limitations

The Item 703 table reports month by month, once a quarter, not day by day, and the 2023 rule that would have required daily data is vacated. Cash paid, shares bought and the change in shares outstanding are three different measures that rarely tie exactly, because of employee share issuance, tax withholding purchases and timing. Rules and tax described here are US rules; companies listed elsewhere follow their own. Nothing on this page describes whether a buyback is good or bad for a company's shareholders or what a share price does after one. The Microsoft figures are from its 10-K for the year ended 30 June 2026, filed 29 July 2026.

Key takeaways

Frequently asked questions

Does a buyback make the share price go up?

Not by any fixed rule. A buyback reduces the number of shares and the company's cash at the same time, so value per share does not mechanically change; what happens to the price depends on what the market makes of the price paid and of everything else. This page describes the mechanics and makes no claim about prices after a buyback.

Is an announced buyback a promise to buy the shares?

No. A board authorisation sets a maximum. Companies can buy less, take years, pause, or end a program; Microsoft's 10-K, for example, says its current program has no expiration date and may be terminated at any time. The Item 703 table in each 10-Q and 10-K shows what was actually bought.

Where can I see how many shares a company bought back last quarter?

In the issuer purchases table: Part II, Item 2 of the 10-Q for the first three fiscal quarters and Part II, Item 5 of the 10-K for the fourth. It gives shares bought and the average price for each month, and the amount still available under announced programs.

Do companies pay tax on buybacks?

In the United States, yes: since 2023 a publicly traded US corporation owes a 1 percent excise tax on the fair market value of stock it repurchases in a year, reduced by the value of stock it issues in the same year, with exceptions such as years with no more than $1 million of repurchases.

Why did shares outstanding fall by less than the shares bought back?

Because companies also issue shares, mostly through employee stock awards and option exercises, and those additions offset part of the repurchases. Microsoft bought 36 million shares under its program in fiscal 2026 while issuing 29 million, so its count fell by 7 million.

Is a buyback better than a dividend?

Neither is better in general; they differ in who receives cash, how it is taxed, and how flexible the commitment is. A dividend pays every holder, a buyback pays only those who sell and leaves the rest with a larger share of the company.

This page is information, not investment advice.

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Source: Microsoft Corporation, Form 10-K for the fiscal year ended 30 June 2026, filed 29 July 2026: Part II Item 5 (share repurchases) and Note 15 (Stockholders' Equity), https://www.sec.gov/Archives/edgar/data/789019/000119312526323660/msft-20260630.htm ; Regulation S-K Item 703, 17 CFR 229.703, https://www.ecfr.gov/current/title-17/section-229.703 ; Form 10-Q General Instructions, Part II Item 2, https://www.sec.gov/files/form10-q.pdf ; Form 10-K General Instructions, Part II Item 5, https://www.sec.gov/files/form10-k.pdf ; Form 8-K General Instructions, https://www.sec.gov/files/form8-k.pdf ; SEC, Share Repurchase Disclosure Modernization, Release No. 34-97424, 88 FR 36002 (1 June 2023), https://www.govinfo.gov/content/pkg/FR-2023-06-01/html/2023-09965.htm ; SEC, Share Repurchase Disclosure Modernization, technical amendments reflecting the vacatur, Release No. 34-99778, 89 FR 24372 (8 April 2024), https://www.govinfo.gov/content/pkg/FR-2024-04-08/html/2024-06187.htm ; Rule 10b-18, 17 CFR 240.10b-18, https://www.ecfr.gov/current/title-17/section-240.10b-18 ; Rule 13e-4, 17 CFR 240.13e-4, https://www.ecfr.gov/current/title-17/section-240.13e-4 ; Internal Revenue Code section 4501, https://www.law.cornell.edu/uscode/text/26/4501 ; Internal Revenue Code section 275, https://www.law.cornell.edu/uscode/text/26/275 ; Treasury and IRS, Excise Tax on Repurchase of Corporate Stock, final regulations, 90 FR 53144 (24 November 2025), https://www.federalregister.gov/documents/2025/11/24/2025-20721/excise-tax-on-repurchase-of-corporate-stock ; IRS, Topic No. 404, Dividends, https://www.irs.gov/taxtopics/tc404 ; worked EPS and excise tax examples: hypothetical figures computed by Kresmion ; Kresmion buybacks page (SEC XBRL company facts).

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