Excel Advanced Formulas: 2026 Guide for Every User

Microsoft Excel has changed more in the past few years than in the previous decade. If you’re still relying on VLOOKUP, nested IF statements, and Ctrl+Shift+Enter array formulas, you’re working harder than you need to.

The latest version of Microsoft Excel introduces powerful features that replace older, clunkier approaches with cleaner, faster alternatives. XLOOKUP handles lookups that VLOOKUP never could. LAMBDA lets you build custom functions without writing a single line of VBA. Dynamic arrays eliminate the need for complex Ctrl+Shift+Enter combinations entirely.

This guide walks through each of these advanced Excel functions with practical business examples you can apply immediately. Whether you use Excel for budgeting, data analysis, reporting, or operations, these formulas will change how you work with spreadsheets.

At Indigo Software Company, we provide genuine Microsoft Office licenses that include full access to these modern Excel capabilities.

Why Old Excel Formulas Hold You Back

Before diving into what’s new, it helps to understand why the old approach creates problems.

The VLOOKUP Problem

VLOOKUP has been the go-to lookup function for decades, but it carries real limitations:

• Only looks right: VLOOKUP searches the leftmost column and returns values to the right. If your lookup column isn’t first, you have to restructure your data.
• Column index numbers break: Hard-coded column numbers (the third argument) break when you insert or delete columns.
• No exact match by default: VLOOKUP defaults to approximate match, causing silent errors when users forget to add FALSE as the fourth argument.
• Slow on large datasets: VLOOKUP scans from top to bottom, making it sluggish on spreadsheets with thousands of rows.

The Nested IF Nightmare

Complex business logic often requires stacking IF functions inside each other:

text=IF(A1>100,IF(A1>200,IF(A1>300,"High","Medium-High"),"Medium"),"Low")

This becomes unreadable fast. One misplaced parenthesis breaks the entire formula, and debugging takes longer than writing it from scratch.

Legacy Array Formulas

Before dynamic arrays, performing calculations across ranges required Ctrl+Shift+Enter (CSE) array formulas. These were:

• Confusing for most users
• Easy to break accidentally
• Invisible (nothing indicates a formula is an array formula without editing it)

Modern Excel eliminates all three problems.

XLOOKUP: The Complete VLOOKUP Replacement

XLOOKUP is the single most important formula upgrade in modern Excel. It replaces VLOOKUP, HLOOKUP, and most INDEX-MATCH combinations with a cleaner, more powerful syntax.

XLOOKUP Syntax

text=XLOOKUP(lookup_value, lookup_array, return_array, [if_not_found], [match_mode], [search_mode])

Argument	Purpose	Required?
lookup_value	The value you’re searching for	Yes
lookup_array	Where to search	Yes
return_array	What to return	Yes
if_not_found	Custom message when no match exists	No
match_mode	Exact, approximate, or wildcard	No
search_mode	First-to-last, last-to-first, binary	No

XLOOKUP vs VLOOKUP: Side-by-Side Comparison

Capability	VLOOKUP	XLOOKUP
Look left	Not possible	Supported
Default match type	Approximate (risky)	Exact (safe)
Column reference	Hard-coded number	Direct range reference
Error handling	Requires IFERROR wrapper	Built-in if_not_found
Search direction	Top to bottom only	Any direction
Multiple return values	Not supported	Returns arrays
Horizontal lookups	Requires HLOOKUP	Same function handles both

Practical Example: Employee Data Lookup

Old approach with VLOOKUP:

text=IFERROR(VLOOKUP(E2,A:D,3,FALSE),"Employee not found")

Modern approach with XLOOKUP:

text=XLOOKUP(E2,A:A,C:C,"Employee not found")

The XLOOKUP version is shorter, clearer, and won’t break if you insert a column between A and C.

XLOOKUP for Business Reporting

Scenario: You maintain a product catalog and need to pull pricing based on product ID.

text=XLOOKUP(B5,Products[ID],Products[Price],"Product not listed")

This formula:

• Searches the ID column for the value in B5
• Returns the corresponding price
• Shows “Product not listed” instead of an error if no match exists

Advanced XLOOKUP: Returning Multiple Columns

XLOOKUP can return entire rows of data at once:

text=XLOOKUP(B5,Products[ID],Products[Price]:Products[Category])

This single formula returns both the price and category, spilling results across multiple cells automatically. No helper columns. No extra formulas.

When XLOOKUP Outperforms INDEX-MATCH

Many advanced Excel users switched from VLOOKUP to INDEX-MATCH years ago. XLOOKUP improves on INDEX-MATCH in several ways:

• Simpler syntax: One function instead of two nested together
• Built-in error handling: No separate IFERROR needed
• Search direction options: Can search bottom-to-top for the last match
• Wildcard support: Built into the match_mode argument

For most use cases in 2026, XLOOKUP should be your default lookup function.

LAMBDA: Build Custom Functions Without VBA

LAMBDA is a game-changer for anyone who has ever wished they could create their own Excel functions without learning Visual Basic for Applications.

What LAMBDA Does

LAMBDA lets you define a reusable custom function using standard Excel formulas. Once created, your function works exactly like built-in functions—you type its name, pass arguments, and get results.

LAMBDA Syntax

text=LAMBDA(parameter1, parameter2, ..., calculation)

Creating Your First LAMBDA Function

Example: A function that calculates sales tax for any amount and rate.

Step 1: Write the LAMBDA formula:

text=LAMBDA(amount, rate, amount * rate)

Step 2: Name it through the Name Manager (Formulas → Name Manager → New):

• Name: SalesTax
• Refers to: =LAMBDA(amount, rate, amount * rate)

Step 3: Use it like any built-in function:

text=SalesTax(500, 0.08)

Result: 40

Real Business Examples with LAMBDA

Markup Calculator

textName: Markup
Formula: =LAMBDA(cost, margin, cost / (1 - margin))
Usage: =Markup(75, 0.30)
Result: 107.14

Compound Interest Calculator

textName: CompoundInterest
Formula: =LAMBDA(principal, rate, years, principal * (1 + rate)^years)
Usage: =CompoundInterest(10000, 0.05, 10)
Result: 16,288.95

Commission Tier Calculator

textName: Commission
Formula: =LAMBDA(sales, IF(sales>=100000, sales*0.10, IF(sales>=50000, sales*0.07, sales*0.05)))
Usage: =Commission(75000)
Result: 5,250

Why LAMBDA Beats VBA Macros for Many Tasks

Factor	VBA Macros	LAMBDA Functions
Learning curve	Steep (programming required)	Moderate (formula-based)
Security concerns	Macro-enabled files raise flags	No security warnings
Portability	Tied to macro-enabled workbooks	Works in standard .xlsx files
Collaboration	Breaks in some shared environments	Works in shared workbooks
Maintenance	Requires VBA knowledge to edit	Any formula user can modify

That said, VBA macros remain necessary for complex automation, UI interaction, and tasks that go beyond calculations. If you need macro functionality, our guide on how to enable macros in Microsoft Excel walks through the setup process.

LAMBDA Helper Functions

Excel introduced companion functions that extend LAMBDA’s power:

• MAP: Applies a LAMBDA function to each element in an array
• REDUCE: Accumulates values across an array using a LAMBDA function
• SCAN: Like REDUCE but shows intermediate results
• MAKEARRAY: Generates arrays using LAMBDA-defined logic
• BYCOL / BYROW: Applies LAMBDA to each column or row

These helper functions turn LAMBDA from a convenience feature into a serious data processing tool.

Dynamic Arrays: Excel’s Biggest Formula Evolution

Dynamic arrays fundamentally change how Excel handles formulas that produce multiple results. Before dynamic arrays, a formula lived in one cell and produced one result. Now, a single formula can fill an entire range automatically.

How Dynamic Arrays Work

When a formula returns multiple values, Excel “spills” the results into adjacent cells. This spill range adjusts automatically when source data changes.

Example:

text=SORT(A2:A20)

Enter this in one cell, and Excel fills the sorted list downward. Add a new value to the source data, and the spill range expands automatically.

The Spill Range Operator (#)

The hash symbol (#) references an entire spill range. If cell D2 contains a dynamic array formula, you can reference all its results with:

text=D2#

This makes it easy to build formulas that depend on dynamic array output.

Essential Dynamic Array Functions

SORT

Sorts data without helper columns or manual sorting:

text=SORT(A2:C100, 2, -1)

Sorts the range by the second column in descending order.

SORTBY

Sorts by a different column than the one displayed:

text=SORTBY(A2:A100, B2:B100, -1)

Returns names sorted by their scores (highest first).

FILTER

Extracts rows meeting specific criteria:

text=FILTER(A2:D100, C2:C100>50000, "No results")

Returns all rows where column C exceeds 50,000. Shows “No results” if no matches exist.

Business application: Pull all orders above a threshold, all employees in a specific department, or all products below reorder level—with a single formula.

UNIQUE

Extracts distinct values from a range:

text=UNIQUE(B2:B500)

Returns every unique value from column B, removing duplicates automatically.

SEQUENCE

Generates number sequences:

text=SEQUENCE(12, 1, 1, 1)

Creates a column of numbers from 1 to 12. Useful for generating row numbers, date sequences, or iteration counters.

RANDARRAY

Creates arrays of random numbers:

text=RANDARRAY(10, 3, 1, 100, TRUE)

Generates a 10-row by 3-column array of random integers between 1 and 100.

Combining Dynamic Arrays for Powerful Results

The real power emerges when you nest these functions together.

Example: Sorted unique list of departments with revenue above $100K:

text=SORT(UNIQUE(FILTER(B2:B500, D2:D500>100000)))

One formula. No helper columns. No pivot table. Updates automatically when data changes.

Example: Top 5 salespeople by revenue:

text=TAKE(SORT(FILTER(A2:B100, B2:B100>0), 2, -1), 5)

This filters out zero-revenue entries, sorts by revenue descending, and returns only the top 5 rows.

Microsoft Excel for Budgeting with Dynamic Arrays

Dynamic arrays transform budgeting workflows. Instead of manually building budget comparison tables, you can:

Create a dynamic budget variance report:

text=FILTER(BudgetData, BudgetData[Variance]<0, "All items on budget")

This instantly shows every line item that’s over budget. As actuals update throughout the month, the report adjusts automatically.

For a hands-on budgeting tutorial, see our guide on building a dynamic budget tracker in Excel.

LET and Other Supporting Functions

LET: Name Variables Inside Formulas

LET assigns names to intermediate calculations within a formula, improving both readability and performance.

Without LET:

text=IF(XLOOKUP(A2,Data[ID],Data[Revenue])>50000, XLOOKUP(A2,Data[ID],Data[Revenue])*0.1, XLOOKUP(A2,Data[ID],Data[Revenue])*0.05)

With LET:

text=LET(revenue, XLOOKUP(A2,Data[ID],Data[Revenue]),
  IF(revenue>50000, revenue*0.1, revenue*0.05))

The LET version calculates the XLOOKUP once and reuses the result. This is faster (one lookup instead of three) and far easier to read.

CHOOSECOLS and CHOOSEROWS

Select specific columns or rows from a range:

text=CHOOSECOLS(A1:F100, 1, 3, 5)

Returns only columns 1, 3, and 5 from the range. Pair this with FILTER and SORT for precise data extraction without restructuring your source data.

TEXTSPLIT, TEXTBEFORE, and TEXTAFTER

Modern text parsing functions that eliminate complex nested MID, FIND, and LEN formulas:

text=TEXTSPLIT(A2, ", ")

Splits comma-separated values into individual cells across a row. Dynamic arrays handle the spill automatically.

VSTACK and HSTACK

Combine ranges vertically or horizontally:

text=VSTACK(Sheet1!A2:B50, Sheet2!A2:B50, Sheet3!A2:B50)

Merges data from three sheets into one continuous range. Updates dynamically as source sheets change.

Microsoft Excel vs Google Sheets: Advanced Formula Comparison

Users frequently ask how Microsoft Excel compares to Google Sheets for advanced formula work. Here’s an honest assessment.

Feature	Microsoft Excel	Google Sheets
XLOOKUP	Full support	Supported (added 2023)
LAMBDA	Full support with helpers	Supported
Dynamic arrays	Native, fully integrated	ArrayFormula required in some cases
VSTACK/HSTACK	Supported	Supported
LET function	Supported	Supported
Performance on large datasets	Superior	Slows on 100K+ rows
Offline access	Full functionality	Limited
VBA/Macros	Full support	Apps Script (different language)
Collaboration	Improved with 365	Native strength

Bottom line: Google Sheets has closed the gap on formula support, but Microsoft Excel maintains advantages in performance, offline capability, and advanced automation. For business environments handling large datasets, Excel remains the stronger choice.

For a detailed comparison, read our article on features that Microsoft Excel has compared to Google Sheets.

Which Excel Version Supports These Formulas?

Not all Excel versions include XLOOKUP, LAMBDA, and dynamic arrays. Here’s what you need:

Feature	Microsoft 365	Office 2024	Office 2021	Office 2019	Office 2016
XLOOKUP	✓	✓	✓	✗	✗
LAMBDA	✓	✓	Partial	✗	✗
Dynamic Arrays	✓	✓	✓	✗	✗
LET	✓	✓	✓	✗	✗
VSTACK/HSTACK	✓	✓	✗	✗	✗
TEXTSPLIT	✓	✓	✗	✗	✗

Key takeaway: Microsoft 365 and Office 2024 provide full access to every advanced formula covered in this guide. Office 2021 covers most features. Office 2019 and earlier lack these modern capabilities entirely.

If you’re running an older version, upgrading unlocks these productivity improvements immediately. Browse our complete software collection to find the right Microsoft Office edition for your needs.

For users still running older systems, our Microsoft Office for Windows 7 guide explains compatibility considerations.

Practical Workflow: Old Formula vs New Formula

Here’s how a real business task looks using old Excel methods compared to modern formulas.

Task: Generate a Report of Top Customers by Revenue

Old Approach (5+ formulas, helper columns required):

1. VLOOKUP to pull customer revenue (breaks if columns shift)
2. Manual sort or helper column with LARGE/INDEX
3. Nested IF statements for revenue tiers
4. Separate COUNTIF for unique customer count
5. Manual copy-paste to update

Modern Approach (2-3 formulas, no helper columns):

text=LET(
  data, FILTER(Customers, Customers[Revenue]>10000),
  sorted, SORT(data, 3, -1),
  TAKE(sorted, 10)
)

This single formula:

• Filters customers above $10K revenue
• Sorts by revenue descending
• Returns the top 10 rows
• Updates automatically when data changes

Time saved: What previously required 15-20 minutes of formula building and maintenance now takes 30 seconds.

Tips for Learning Advanced Excel Formulas

Start with XLOOKUP

Replace one VLOOKUP in your current workbook with XLOOKUP. Notice how much simpler the syntax is. Build confidence before tackling LAMBDA or complex dynamic arrays.

Practice with Real Data

Generic tutorials teach syntax. Real improvement comes from applying formulas to your actual work—your sales data, your budget spreadsheets, your inventory reports.

Build a Formula Reference Sheet

Create a workbook with one tab per formula family (lookups, dynamic arrays, LAMBDA). Add your own examples and notes. This becomes your personal reference that’s more useful than any generic cheat sheet.

Combine with Macros When Needed

Advanced formulas handle calculations beautifully, but automation tasks like formatting, email generation, and file management still benefit from macros. Learn how to enable macros in Microsoft Excel to combine both approaches.

Use Named Ranges and Tables

Dynamic arrays and XLOOKUP work best with structured tables (Ctrl+T). Table references like Sales[Revenue] are self-documenting and expand automatically as you add rows.

Finding the Right Microsoft Software

Where to Buy Microsoft Excel

Excel is included in every Microsoft Office suite. You don’t purchase Excel as a standalone product for most editions—it comes bundled with Word, PowerPoint, and other applications.

For those wondering where to buy Microsoft Excel with full advanced formula support, genuine Microsoft Office licenses from Indigo Software Company include the latest Excel capabilities. Check our tips for finding the best deals on Microsoft software to get the best value.

Excel advanced formulas in 2026 represent a genuine shift in how spreadsheet work gets done. XLOOKUP replaces VLOOKUP with a more capable, less error-prone alternative. LAMBDA puts custom function creation within reach of anyone who can write formulas. Dynamic arrays eliminate helper columns, manual sorting, and fragile CSE array formulas.

Learning these functions takes hours, not weeks. The productivity gains compound daily across every spreadsheet you touch. Start by replacing one VLOOKUP with XLOOKUP in a workbook you use regularly. Notice the difference. Then keep going.

To access every advanced formula covered in this guide, you need Microsoft 365 or Office 2024. Explore genuine Microsoft Office licenses at Indigo Software Company and ensure your Excel is ready for modern formula work.

Frequently Asked Questions