microsoft revenue by segmentmicrosoft revenue by segment

dollars)." Xbox hardware revenue increased 92% driven by higher price of consoles sold due to the Xbox Series X|S launches. Generally, this occurs shortly before the products are released to production. Reality Labs' total loss for 2022 came in . Certain of our counterparty agreements for derivative instruments contain provisions that require our issued and outstanding long-term unsecured debt to maintain an investment grade credit rating and require us to maintain minimum liquidity of $1.0 billion. We have a strong position with our large and growing highly engaged community of gamers, including the March 2021 acquisition of ZeniMax Media Inc., the parent company of Bethesda Softworks LLC, one of the largest, privately held game developers and publishers in the world. The . Azure Synapse Analytics, a limitless analytics service, brings together data integration, enterprise data warehousing, and big data analytics for immediate business intelligence and machine learning needs. As part of our effort to promote a One Microsoft and inclusive culture, we expanded stock eligibility to all Microsoft employees as part of our annual rewards process. But the most notable thing is what will happen to the other 90 percent. Our search business competes with Google and a wide array of websites, social platforms like Facebook, and portals that provide content and online offerings to end users. The Company engaged Deloitte & Touche LLP, an independent registered public accounting firm, to audit and render an opinion on the consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). We account for certain assets and liabilities at fair value. Inventories are stated at average cost, subject to the lower of cost or net realizable value. Growth depends on our ability to reach new users in new markets such as frontline workers, small and medium businesses, and growth markets, as well as add value to our core product and service offerings to span productivity categories such as communication, collaboration, analytics, security, and compliance. This included a commitment to invest $1 billion over four years in new technologies and innovative climate solutions. Our Enterprise Services business competes with a wide range of companies that provide strategy and business planning, application development, and infrastructure services, including multinational consulting firms and small niche businesses focused on specific technologies. Accumulated Other Comprehensive Income (Loss), New integrations between Dynamics 365 and Teams, pending acquisition of Nuance Communications, we will invest $20 billion over the next five years, our acquisition this year of ZeniMax Media, 25 million people connect to the digital skills for in-demand roles, Racial Equity Initiative: Strengthening Our Communities report, humanitarian action and emergency response, http://www.microsoft.com/investor/AnnualReports/default.aspx, Adjusted diluted earnings per share (non-GAAP), Net gains (losses) on foreign currency remeasurements, Net income tax benefit related to India Supreme Court decision on withholding taxes, Operating leases, including imputed interest, Finance leases, including imputed interest, 100 basis point increase in U.S. treasury interest rates, 100 basis point increase in credit spreads. The leading indicator of digital transformation success can be measured by an organizations ability to build predictive and analytical power. The gamer remains at the heart of the Xbox ecosystem. We have not received a proposed assessment for the unresolved key transfer pricing issues and do not expect a final resolution of these issues in the next 12 months. Foreign currency risks related to certain Euro-denominated debt are hedged using foreign exchange forward contracts that are designated as cash flow hedging instruments. Aggregate demand for our software, services, and devices is correlated to global macroeconomic and geopolitical factors, which remain dynamic. Enterprise Agreements are designed for medium or large organizations that want to license cloud services and on-premises software organization-wide over a three-year period. Register in seconds and access exclusive features. As organizations focus on creating their own technology solutions, they will need standardized tools to modernize existing apps and build new ones. Other reconciling items, net consists primarily of tax credits and GILTI tax, and in fiscal year 2021, includes tax benefits from the India Supreme Court decision on withholding taxes. Former Executive Vice President and Revenue from sales of Windows Pro licenses sold through the OEM channel, which primarily addresses demand in the commercial market, Revenue from sales of Windows non-Pro licenses sold through the OEM channel, which primarily addresses demand in the consumer market, Windows Commercial products and cloud Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2020, the effect of this change in estimate for fiscal year 2021 was an increase in operating income of $2.7 billion and net income of $2.3 billion, or $0.30 per both basic and diluted share. These levels are: We measure equity investments without readily determinable fair values on a nonrecurring basis. Additionally, we have agreed to cover damages resulting from breaches of certain security and privacy commitments in our cloud business. Growth depends on our ability to attract new users, understand intent, and match intent with relevant content and advertiser offerings. Revenue related to cloud services provided on a consumption basis, such as the amount of storage used in a period, is recognized based on the customer utilization of such resources. Customer mix between consumer, small and medium businesses, and large enterprises. Metrics related to our More Personal Computing segment assess the performance of key lines of business within this segment. We perform a qualitative assessment on a periodic basis. GO RESET FILTER. Microsoft said revenue in its "Intelligent Cloud" segment rose 23% to $14.6 billion, with 50% growth in Azure. Net realizable value is the estimated selling price less estimated costs of completion, disposal, and transportation. Second quarter revenue is driven by corporate year-end spending trends in our major markets and holiday season spending by consumers, and fourth quarter revenue is driven by the volume of multi-year on-premises contracts executed during the period. Certain income and expenses are not reported in tax returns and financial statements in the same year. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Economic Conditions, Challenges, and Risks. We have savings plans in the U.S. that qualify under Section 401(k) of the Internal Revenue Code, and a number of savings plans in international locations. From GitHub to Visual Studio, we provide a developer tool chain for everyone, no matter the technical experience, across all platforms, whether Azure, Windows, or any other cloud or client platform. Our gaming platform competes with console platforms from Nintendo and Sony, both of which have a large, established base of customers. . Net recognized gains (losses) on debt investments were as follows: Net recognized gains (losses) on equity investments were as follows: The components of investments were as follows: Equity investments presented as Other in the tables above include investments without readily determinable fair values measured using the equity method or measured at cost with adjustments for observable changes in price or impairments, and investments measured at fair value using net asset value as a practical expedient which are not categorized in the fair value hierarchy. Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact in our consolidated financial statements, these matters are subject to inherent uncertainties and managements view of these matters may change in the future. Our future opportunity depends on reaching and empowering all communities, and we are committed to taking action to help address racial injustice and inequity. Microsoft Teams, Azure and security all helped push . In December 2019, the FASB issued a new standard to simplify the accounting for income taxes. Additionally, we have seen growth in our Black- and African American-owned supplier base and in Black- and African American-owned technology partners in the Microsoft Partner Network, and we launched the Black Channel Partner Alliance community to support partners onboarding to the Microsoft Cloud and to unlock partner benefits for co-selling with Microsoft. To ensure accountability over time, we publicly disclose our progress on a multitude of workforce metrics including: We develop dynamic, sustainable, and strategic programs with the goal of providing a highly differentiated portfolio to attract, reward, and retain top talent and enable our employees to do their best work. Every organization is looking to digitize their end-to-end operationsfrom sales and customer service to supply chain managementso they can rapidly adapt to changing market dynamics. And as a global technology company, we have a particular responsibility to do our part. Learn more about how Statista can support your business. The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. We also have an ESPP for all eligible employees. More personal Computing. Awards that expire or are canceled without delivery of shares generally become available for issuance under the plans. July 29, 2021. Our commercial business primarily consists of Server products and cloud services, Office Commercial, Windows Commercial, the commercial portion of LinkedIn, Enterprise Services, and Dynamics. Chairman and Chief Executive Officer, Amy E. Hood Our international operations provide a significant portion of our total revenue and expenses. Business Solutions including all features. Refer to Risk Factors in our fiscal year 2021 Form 10-K for a discussion of these factors and other risks. We believe our allowances for income tax contingencies are adequate. And yet, as I reflect on what has been a very challenging year for so manyone that will be forever remembered as a heartbreaking chapter in our historyI find reasons to be hopeful. In fiscal year 2020, we removed $2.0 billion of foreign net operating losses and corresponding valuation allowances as a result of the liquidation of a foreign subsidiary. Amy E. Hood We are focused on building capabilities to support a variety of workstyles where individuals, teams, and our business can be successful. Our approach to privacy begins with the belief that people have a right to own their personal data and that companies have a responsibility to collect and use personal data responsibly. Of the total employed people, 67,000 were in operations, including manufacturing, distribution, product support, and consulting services; 60,000 were in product research and development; 40,000 were in sales and marketing; and 14,000 were in general and administration. PepsiCo, Charles W. Scharf 2,3 It is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss. We offer an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and we provide solution support and consulting services. We also design and sell devices, including PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. While the Company has settled a portion of the IRS audits, resolution of the remaining matters could have a material impact on the Companys financial statements. That compared with a Wall Street . Revenue from consulting services is recognized as services are provided. Virtual Shareholder Meeting: www.virtualshareholdermeeting.com/MSFT21. Gaming, including Xbox hardware and Xbox content and services, comprising digital transactions, Xbox Game Pass and other subscriptions, video games, third-party video game royalties, cloud services, and advertising. These contracts are not designated as hedging instruments and are included in Other contracts in the tables below. Judgment is required in assessing the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. Our consumer businesses also benefited from the remote environment, with continued demand for PCs and productivity tools, as well as strong engagement across our Gaming platform. The components of the deferred income tax assets and liabilities were as follows: Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when the taxes are paid or recovered. Under the terms of the ESPP that were approved in 2012, the plan will terminate on December 31, 2022. Windows Commercial products and cloud services revenue increased 14%. Total. During fiscal year 2020, we recorded an impairment charge of $186 million to Property and Equipment, primarily to leasehold improvements, due to the closing of our Microsoft Store physical locations. 18,327. Sure enough, Microsoft says its "more personal computing" business, including Windows and Xbox, was up 11 percent to $14.5 billion in Q3 and "Windows OEM revenue growth," which should . Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. The ten-month claims period commenced on November 23, 2020 and will close on September 23, 2021. We believe our gaming platform is effectively positioned against, and uniquely differentiated from, competitive products and services based on significant innovation in hardware architecture, user interface, developer tools, online gaming and entertainment services, and continued strong exclusive content from our own first-party game franchises as well as other digital content offerings. We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. We also know that solving the carbon problem will require new technology and partnerships. PSUs generally vest over a performance period of three years. Our server products face competition from a wide variety of server operating systems and applications offered by companies with a range of market approaches. Constraints in the supply chain of device components. Our goal is to help every organization strengthen its security capabilities through a Zero Trust architecture built on our comprehensive solutions that span identity, security, compliance, and device management across all clouds and platforms. Many of these revenue and expenses are denominated in currencies other than the U.S. dollar. In the second quarter of fiscal year 2021, we settled an additional portion of the IRS audits for tax years 2004 to 2013 and made a payment of $1.7 billion, including tax and interest. Price Quote as of 2/17/2023 4:00:00 PM - ET. Windows OEM revenue is impacted significantly by the number of Windows operating system licenses purchased by OEMs, which they pre-install on the devices they sell. Founder and Chairman, Trilogy We are living in the new era of the intelligent cloud and intelligent edge, which is being sharpened by rapid advances in distributed computing, ambient intelligence, and multidevice experiences. The increase in our effective tax rate for fiscal year 2020 compared to fiscal year 2019 was primarily due to a $2.6 billion net income tax benefit in the fourth quarter of fiscal year 2019 related to intangible property transfers. We market and distribute our products and services through the following channels: OEMs, direct, and distributors and resellers. Microsoft Experience Centers are designed to facilitate deeper engagement with our partners and customers across industries. Interest is paid semi-annually, except for the Euro-denominated debt, which is paid annually. This will give organizations greater flexibility and a more secure way to empower employees to be productive and connected, regardless of their location. The Company remains under IRS audit, or subject to IRS audit, for tax years subsequent to 2003. The following table presents the fair value of our derivatives instruments on a gross basis: Gains (losses) on derivative instruments recognized in our consolidated income statements were as follows: Gains (losses), net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows: The components of inventories were as follows: The components of property and equipment were as follows: During fiscal years 2021, 2020, and 2019, depreciation expense was $9.3 billion, $10.7 billion, and $9.7 billion, respectively. Changes in these factors could materially impact our consolidated financial statements. Please do not hesitate to contact me. The largest category of OEMs are direct OEMs as our relationship with them is managed through a direct agreement between Microsoft and the OEM. These metrics provide strategic product insights which allow us to assess the performance across our commercial and consumer businesses. Microsoft's Intelligent Cloud segment, which includes the Azure public cloud for application hosting, SQL Server, Windows Server and enterprise services generated $20.91 billion in revenue. Microsoft Corporation will be reporting its Q2 results after market close tomorrow, 1/24. 6. services revenue growth, Revenue from Windows Commercial products and cloud services, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings, Revenue from Surface devices and accessories, Revenue from Xbox content and services, comprising digital transactions, Xbox Game Pass and other subscriptions, video games, third-party video game royalties, cloud services, and advertising, Search advertising revenue, excluding TAC, growth, Revenue from search advertising excluding traffic acquisition costs (TAC) paid to Bing Ads network publishers. Price as of February 28, 2023, 12:39 p.m. Following are the details of the purchase price allocated to the intangible assets acquired: Transactions recognized separately from the purchase price allocation were approximately $600 million, primarily related to equity awards recognized as expense over the related service period. Windows also plays a critical role in fueling our cloud business and Microsoft 365 strategy, and it powers the growing range of devices on the intelligent edge.. $59.66B. Full-year fiscal '23 estimates today expect Microsoft to earn $9.55 in EPS on $212.2 billion in revenue for expected growth in the next 6 months of 4% in EPS and 7% in revenue. A number of companies, such as Red Hat, supply versions of Linux. The decrease from the federal statutory rate in fiscal year 2020 is primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland and Puerto Rico, and tax benefits relating to stock-based compensation. We believe that our audits provide a reasonable basis for our opinion. To serve the needs of customers around the world and to improve the quality and usability of products in international markets, we localize many of our products to reflect local languages and conventions. Windows 11 builds on the strengths of productivity, versatility, and security on Windows 10 today and adds in new experiences that include powerful task switching tools like new snap layouts, snap groups, and desktops; new ways to stay connected through chat; the information you want at your fingertips; and more. These costs include our internal sales force compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. The proceeds of these issuances were or will be used for general corporate purposes, which may include, among other things, funding for working capital, capital expenditures, repurchases of capital stock, acquisitions, and repayment of existing debt. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. We selected a sample of customer agreements and performed the following procedures: Obtained and read contract source documents for each selection, including master agreements, and other documents that were part of the agreement. 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