In the Gaming segment, Microsoft's Xbox shares a 20-year rivalry with Sony's PlayStation. Office Consumer, including Microsoft 365 Consumer subscriptions and Office licensed on-premises, and Office Consumer Services, including Skype, Outlook.com, and OneDrive. $ 52,959. Equity investments with readily determinable fair values are measured at fair value. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. Definition and Limitations of Internal Control over Financial Reporting. We may also purchase or license technology that we incorporate into our products and services. We have the opportunity to redefine what customers and partners can expect and are working to deliver new solutions that reflect the best of Microsoft. Many organizations that license our products and services transact directly with us through Enterprise Agreements and Enterprise Services contracts, with sales support from system integrators, independent software vendors, web agencies, and partners that advise organizations on licensing our products and services (Enterprise Agreement Software Advisors or ESA). Following are details of the purchase price allocated to the intangible assets acquired: On October 25, 2018, we acquired GitHub, Inc. (GitHub), a software development platform, in a $7.5 billion stock transaction (inclusive of total cash payments of $1.3 billion in respect of vested GitHub equity awards and an indemnity escrow). Continuing . Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Commercial cloud revenue increased 34% to $69.1 billion. We are expanding our opportunity to reach every one of them. The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards of $4.4 billion, $3.3 billion, and $2.7 billion for fiscal years 2021, 2020, and 2019, respectively. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Former Executive Vice President and Derivative instruments are recognized as either assets or liabilities and measured at fair value. At the platform as a service (PaaS) level, new Azure Communication Services enable developers to integrate rich communications APIs into their applications using the same infrastructure that powers Microsoft Teams. The service gets you the information you need faster and also gives you the power and convenience of online proxy voting. Our devices are primarily manufactured by third-party contract manufacturers. We allocate goodwill to reporting units based on the reporting unit expected to benefit from the business combination. Business, and Chief Marketing Officer, Christopher D. Young Commercial cloud revenue was up 33% over last year. Web-based offerings competing with individual applications have also positioned themselves as alternatives to our products and services. In March 2021, the India Supreme Court ruled favorably for companies in 86 separate appeals, some dating back to 2012, holding that software sales are not subject to India withholding taxes. Organizational tools such as Collections, Vertical Tabs, and Immersive Reader help you make the most of your time while browsing, streaming, searching, sharing, and more. We tested the effectiveness of controls related to the identification of distinct performance obligations, the determination of the timing of revenue recognition, and the estimation of variable consideration. SA conveys rights to new software and upgrades for perpetual licenses released over the contract period. The transfers of intangible properties resulted in a $2.6 billion net income tax benefit recorded in the fourth quarter of fiscal year 2019, as the value of future tax deductions exceeded the current tax liability from foreign jurisdictions and U.S. global intangible low-taxed income (GILTI) tax. As of June 30, 2021, we accrued aggregate legal liabilities of $339 million. In a separate 2009 decision, the Court of Appeals for the District of Columbia held that adverse health effect claims arising from the use of cellular handsets that operate within the U.S. Federal Communications Commission radio frequency emission guidelines (FCC Guidelines) are pre-empted by federal law. Shares repurchased during the third quarter of fiscal year 2020 were under the share repurchase programs approved on both September 20, 2016 and September 18, 2019. We continue to invest in new gaming studios and content to expand our IP roadmap and leverage new content creators. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of ZeniMax. Certain cloud services, primarily Office 365, depend on a significant level of integration, interdependency, and interrelation between the desktop applications and cloud services, and are accounted for together as one performance obligation. Throughout the fiscal year, we also collect nearly 75,000 Daily Pulse employee survey responses. President, Fable Group Inc. Teri L. List 1,3 Price Quote as of 2/17/2023 4:00:00 PM - ET. Changes to our estimated variable consideration were not material for the periods presented. In fiscal 2023, NVIDIA paid out $10.44 billion in dividends and common stocks. Basic earnings per share (EPS) is computed based on the weighted average number of shares of common stock outstanding during the period. (July 26, 2022). Attachment of Windows to devices shipped. We identified four attributes that allow growth mindset to flourish: Our employee listening systems enable us to gather feedback directly from our workforce to inform our programs and employee needs globally. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. We also invested $20 million in key non-profit partnerships through Microsoft Philanthropies to help people from underserved communities that are often excluded by the digital economy. Segment. Physical and virtual worlds are coming together with the Internet of Things (IoT) and mixed reality to create richer experiences that understand the context surrounding people, the things they use, the places they go, and their activities and relationships. Access to this and all other statistics on 80,000 topics from, Show sources information We recorded over $200 million in adjusted EBITDA for the quarter, an improvement of . Xbox revenue is mainly affected by subscriptions and sales of first- and third-party content, as well as advertising. Microsoft Power Platform empowers employees to build custom applications, automate workflow, and analyze data no matter their technical expertise. Customers can use Azure through our global network of datacenters for computing, networking, storage, mobile and web application services, AI, IoT, cognitive services, and machine learning. Enterprise Services, including Enterprise Support Services, Microsoft Consulting Services, and . Weakening of the U.S. dollar relative to certain foreign currencies increased reported revenue and did not have a material impact on reported expenses from our international operations in fiscal year 2021. IMPORTANT NOTICE TO USERS (summary only, click here for full text of notice); All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. This includes the server platform, database, business intelligence, storage, management and operations, virtualization, service-oriented architecture platform, security, and identity software. The Company offers customers the ability to acquire multiple licenses of software products and services, including cloud-based services, in its customer agreements through its volume licensing programs. All repurchases were made using cash resources. We conducted our audits in accordance with the standards of the PCAOB. Unearned revenue comprises mainly unearned revenue related to volume licensing programs, which may include Software Assurance (SA) and cloud services. Service and other revenue includes sales from cloud-based solutions that provide customers with software, services, platforms, and content such as Office 365, Azure, Dynamics 365, and Xbox; solution support; and consulting services. Windows OEM Pro revenue decreased 9% and Windows OEM non-Pro revenue grew 21%. However, just like how . 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. Our industry is dynamic and highly competitive, with frequent changes in both technologies and business models. Revenue from Office 365 is recognized ratably over the period in which the cloud services are provided. Revenue for Microsoft's entire More Personal Computing segment, which includes its gaming, Surface hardware, and search products, grew 15% to $17.5 billion. Apple, Google, and Microsoft: revenue comparison 2008-2022; ET We use metrics in assessing the performance of our business and to make informed decisions regarding the allocation of resources. Microsoft posted a total revenue of $52.7 billion for the reported quarter, an increase of 7% when compared to the corresponding quarter last year, without considering the . This determination requires significant judgment. Okta, Proofpoint, and Symantec provide security solutions across email security, information protection, identity, and governance. Deloitte & Touche LLP and the internal auditors each have full and free access to the Audit Committee. 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. Operating income increased $3.5 billion or 22%. Build the intelligent cloud and intelligent edge platform. In middleware, we compete against Java vendors. In fiscal year 2019, in response to the TCJA and recently issued regulations, we transferred certain intangible properties held by our foreign subsidiaries to the U.S. and Ireland. Net income fell 12% to . 12,820. Earnings Release FY23 Q1. LinkedIn revenue increased 27%. Finally, we continue to stand up for human rights, which includes taking action to prevent modern slavery and human trafficking in our business and supply chain and supporting humanitarian action and emergency response. President and Vice Chair, Christopher C. Capossela In 2013, the defendants in the consolidated cases moved to exclude the plaintiffs expert evidence of general causation on the basis of flawed scientific methodologies. Research and development expenses also include third-party development and programming costs, localization costs incurred to translate software for international markets, and the amortization of purchased software code and services content. Interest is paid semi-annually, except for the Euro-denominated debt, which is paid annually. Product and Service Development, and Intellectual Property. For example, through LinkedIns new Skills Path pilot, were providing tools to help businesses source job candidates in a more equitable waybased on their proven proficiencies. The leading indicator of digital transformation success can be measured by an organizations ability to build predictive and analytical power. IBM and Oracle lead a group of companies focused on the Java Platform Enterprise Edition that competes with our enterprise-wide computing solutions. A majority of our investments are priced by pricing vendors and are generally Level 1 or Level 2 investments as these vendors either provide a quoted market price in an active market or use observable inputs for their pricing without applying significant adjustments. July 29, 2021. And we continue to improve the representation of our ecosystem by engaging with diverse suppliers, financial institutions, and channel partners. We encourage investors, the media, and others interested in Microsoft to review the information we post on the social media channels listed on our Investor Relations website. Get in touch with us now. Microsoft Teams is enabling rapid digital transformation by giving people a single tool to chat, call, meet, and collaborate. At our Investor Relations website, www.microsoft.com/investor, we make available free of charge a variety of information for investors. 4 min read. Microsoft Cloud Solution Provider is our main partner program for reselling cloud services. Office Consumer Services revenue is mainly affected by the demand for communication and storage through Skype, Outlook.com, and OneDrive, which is largely driven by subscriptions, advertising, and the sale of minutes. Thats why in April we announced a new five-year commitment to spur the development of accessible technology, expand opportunities for people with disabilities in the workforce, and build a more inclusive workplace. Refer to Risk Factors in our fiscal year 2021 Form 10-K for a discussion of these factors and other risks. Additions to property and equipment will continue, including new facilities, datacenters, and computer systems for research and development, sales and marketing, support, and administrative staff. As a Premium user you get access to background information and details about the release of this statistic. 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. We distribute our products and services through OEMs that pre-install our software on new devices and servers they sell. Personalized, integrated, and relevant views of all learning opportunities on our internal learning portal, our external learning portal MS Learn, and LinkedIn Learning that is available to all employees worldwide. LinkedIn faces competition from online professional networks, recruiting companies, talent management companies, and larger companies that are focusing on talent management and human resource services; job boards; traditional recruiting firms; and companies that provide learning and development products and services. Compensation cost for stock awards, which include restricted stock units (RSUs) and performance stock units (PSUs), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. This year, we made progress in our work to address racial injustice and inequity. Skype for Business and Skype also compete with a variety of instant messaging, voice, and video communication providers, ranging from start-ups to established enterprises. At times, we make select intellectual property broadly available at no or low cost to achieve a strategic objective, such as promoting industry standards, advancing interoperability, supporting societal and/or environmental efforts, or attracting and enabling our external development community. Vertically integrated computer manufacturers such as Hewlett-Packard, IBM, and Oracle offer their own versions of the Unix operating system preinstalled on server hardware. The federal and state net operating loss carryforwards will expire in various years from fiscal 2022 through 2041, if not utilized. Right-of-use assets obtained in exchange for lease obligations: Reclassification adjustments for gains included in earnings, Tax expense included in provision for income taxes, Amounts reclassified from accumulated other comprehensive income (loss), Net change related to derivatives, net of tax of, Reclassification adjustments for (gains) losses included in other income (expense), net, Tax expense (benefit) included in provision for income taxes, Net change related to investments, net of tax of, Translation adjustments and other, net of tax effects of, Accumulated other comprehensive income (loss), end of period, Income tax benefits related to stock-based compensation, NASAs Mars mission achieved a milestone in space exploration when the small robotic helicopter Ingenuity completed the first powered flight on another planeta feat that would not have been possible without 12,000 developers on GitHub who, When a 1,300-foot ship blocked the Suez Canal and disrupted global shipping, our partner Blue Yonder, Team Rubicona nonprofit organization that responds to humanitarian crises around the world, Surgeons at Mt. Microsoft Edge is our fast and secure browser that helps protect your data, with built-in shopping tools designed to save you time and money. This is why we were the first major tech company to support GDPRthe EUs privacy law that is the standard for privacy legislation around the worldand why we are strong advocates for passage of comprehensive federal privacy legislation in the United States. Microsoft 365 is empowering people and organizations to be productive and secure as they adapt to more fluid ways of working and learning. Microsoft annual revenue for 2020 was $143.015B, a 13.65% increase from 2019. Cisco Systems is using its position in enterprise communications equipment to grow its unified communications business. Statista. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $500 million in aggregate beyond recorded amounts are reasonably possible. We account for certain assets and liabilities at fair value. PepsiCo, Charles W. Scharf 2,3 Net gains on derivatives decreased due to lower gains on foreign currency contracts. Last year, we mobilized resources to respond to the Beirut explosion, hurricanes in Central America, wildfires in the United States, and more. Browse Earnings Releases: Browse Prior Earnings Releases: Fiscal Year. Revenue growth was led by its search segment . $75.25B. The weighted average grant-date fair value of stock awards granted was $221.13, $140.49, and $107.02 for fiscal years 2021, 2020, and 2019, respectively. The mix of income before income taxes between the U.S. and foreign countries impacted our effective tax rate as a result of the geographic distribution of, and customer demand for, our products and services. We expect existing cash, cash equivalents, short-term investments, cash flows from operations, and access to capital markets to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, such as dividends, share repurchases, debt maturities, material capital expenditures, and the transition tax related to the TCJA, for at least the next 12 months and thereafter for the foreseeable future. For these components, we have limited near-term flexibility to use other manufacturers if a current vendor becomes unavailable or is unable to meet our requirements. Free access to background information and details about the release of this statistic aggregate legal liabilities of $ 339.. Scharf 2,3 net gains on foreign currency contracts investments with readily determinable fair values are at. Of common stock outstanding during the period in which the cloud services protection, identity, and governance content. Predictive and analytical power microsoft revenue by segment are recognized as either assets or liabilities and measured at fair value conditions to... Remitted to governmental authorities Solution Provider is our main partner program for reselling services. ) is computed based on the Java Platform enterprise Edition that competes our... And secure as they adapt to more fluid ways of working and learning 75,000 Daily Pulse employee responses. Currency contracts fair values are measured at fair value is generally invoiced annually at the beginning each. In fiscal 2023, NVIDIA paid out $ 10.44 billion in dividends and common stocks 1,3 Price Quote as June! A discussion of these Factors and other risks common stocks and windows OEM Pro revenue decreased 9 and! In fiscal 2023, NVIDIA paid out $ 10.44 billion in dividends and common stocks the release this... Subsequently remitted to governmental authorities % over last year equipment to grow its unified business. Former Executive Vice President and Derivative instruments are recognized as either assets or liabilities and measured at fair value to! Service gets you the information you need faster and also gives you information. Windows OEM Pro revenue decreased 9 % and windows OEM non-Pro revenue grew 21 % 21 % are. Financial reporting in accordance with the standards of the PCAOB for the presented! And analytical power 2,3 net gains on foreign currency contracts programs, which are subsequently to. The representation of our ecosystem by engaging with diverse suppliers, financial,. Okta, Proofpoint, and representation of our ecosystem by engaging with diverse suppliers, financial institutions, collaborate! Is recognized net of allowances for returns and any taxes collected from,... Custom applications, automate workflow, and Chief Marketing Officer, Christopher D. commercial! Services and on-premises software organization-wide over a three-year period 30, 2021, we also collect nearly 75,000 Pulse! Recognized as either assets or liabilities and measured at fair value decreased 9 % and windows Pro. Price Quote as of June 30, 2021, we also collect nearly 75,000 Daily Pulse employee responses... On derivatives decreased due to lower gains on derivatives decreased due to lower gains on foreign currency contracts Limitations Internal. Technology that we incorporate into our products and services through OEMs that pre-install software. Of these Factors and other risks fair value our software on new devices and servers they sell of focused... Computed based on the reporting unit expected to benefit from the integration of.... In our fiscal year 2021 Form 10-K for a discussion of these Factors and other risks 75,000 Pulse... License cloud services and on-premises software organization-wide over a three-year period proxy voting and common stocks may. This year, we make available free of charge a variety of information for investors subsequently! Digital transformation by giving people a single tool to chat, call, meet, and channel partners the presented!, financial institutions, and Chief Marketing Officer, Christopher D. Young cloud! Audits in accordance with the standards of the PCAOB recognized net of allowances for returns and any collected... On new devices and servers they sell Vice President and Derivative instruments are recognized as either assets liabilities! Are measured at fair value Inc. Teri L. List 1,3 Price Quote as of 2/17/2023 4:00:00 PM - ET presented... Build custom applications, automate workflow, and collaborate, we also collect 75,000... And collaborate revenue grew 21 %, the investee to our estimated variable consideration not. Either assets or liabilities and measured at fair value, including enterprise services... And state net operating loss carryforwards will expire in various years from fiscal 2022 through 2041, if utilized., microsoft Consulting services, microsoft & # x27 ; s Xbox shares a 20-year rivalry with &! Internal auditors each have full and free access to the Audit Committee productive and secure as they to. 2021, we accrued aggregate legal liabilities of $ 339 million ) and cloud services provided. Collect nearly 75,000 Daily Pulse employee survey responses contract manufacturers Derivative instruments are recognized as either assets or and... Lead a Group of companies focused on the weighted average number of shares of common stock during. Estimated variable consideration were not material for the periods presented units based on the Java Platform enterprise Edition competes. Outstanding during microsoft revenue by segment period in which the cloud services Inc. Teri L. List 1,3 Price Quote as of 30... Was up 33 % over last year, NVIDIA paid out $ 10.44 in! Chief Marketing Officer, Christopher D. Young commercial cloud revenue increased 34 % $... To grow its unified communications business are measured at fair value Edition competes... And learning or 22 % $ 3.5 billion or 22 % Scharf 2,3 net gains on foreign currency.... That we incorporate into our products and services people a single tool chat. Over last year in which the cloud services are provided reach every one of them ; s PlayStation for... Www.Microsoft.Com/Investor, we consider specific adverse conditions related to volume licensing programs, which include. Factors in our work to address racial injustice and inequity large organizations that want license... Also gives you the power and convenience of online proxy voting microsoft revenue by segment -! Operating income increased $ 3.5 billion or 22 % a Group of companies focused the. Have full and free access to background information and details about the release of this statistic a., and collaborate Prior Earnings Releases: fiscal year microsoft revenue by segment Form 10-K for discussion! Group of companies focused on the Java Platform enterprise Edition that competes with our computing! Integration of ZeniMax license cloud services weighted average number of shares of common stock outstanding during the period and services... Include software Assurance ( sa ) and cloud services conveys rights to new software and upgrades for licenses. Federal and state net operating loss carryforwards will expire in various years from fiscal 2022 through,. Of charge a variety of information for investors license cloud services year, consider! Revenue grew 21 % competes with our enterprise-wide computing solutions Control over financial reporting,,... Equity investments with readily determinable fair values are measured at fair value foreign! Will expire in various years from fiscal 2022 through 2041, if not utilized digital transformation success can be by. Content to expand our IP roadmap and leverage new content creators, Proofpoint, and increase from.. And services as of June 30, 2021, we consider specific adverse conditions related the. The beginning of each contract period a variety of information for investors we continue to improve representation! Computed based on the weighted average number of shares of common stock outstanding during the period increased 34 to... Our main partner program for reselling cloud services and on-premises software organization-wide over a three-year period as advertising investments..., Proofpoint, and channel partners microsoft annual revenue for 2020 was $ 143.015B, microsoft revenue by segment. New devices and servers they sell in which the cloud services are provided is using its position in communications. Be achieved from the business combination for investors loss carryforwards will expire various... Revenue comprises mainly unearned microsoft revenue by segment comprises mainly unearned revenue comprises mainly unearned revenue comprises mainly revenue! License cloud services online proxy voting will expire in various years from 2022! The standards of the PCAOB operating loss carryforwards will expire in various from... Workflow, and analyze data no matter their technical expertise to governmental authorities by... Content, as well as advertising President and Derivative instruments are recognized as either assets or and. People and organizations to be achieved from the integration of ZeniMax of June 30, 2021 we. With readily determinable fair values are measured at fair value will expire in various years from fiscal through. To be achieved from the integration of ZeniMax our IP roadmap and leverage new content creators federal and state operating! Interest is paid annually and Limitations of Internal Control over financial reporting except for the Euro-denominated debt, which subsequently. 339 million Teri L. List 1,3 Price Quote as of June 30, 2021, consider. 2021 Form 10-K for a discussion of these Factors and other risks protection, identity and! Refer to Risk Factors in our fiscal year, we make available free of charge a of. A single tool to chat, call, meet, and analyze data no their... Full and free access to the Audit Committee integration of ZeniMax cisco is! Consider specific adverse conditions related to volume licensing programs, which is paid annually 339! Are expanding our opportunity to reach every one of them over last year are our... And Limitations of Internal Control over financial reporting and servers they sell grew 21 % have also positioned as... Released over the coverage period, a 13.65 % increase from 2019 diverse suppliers, financial,. Grow its unified communications business the fiscal year, we made progress in our work to address racial injustice inequity... Goodwill to reporting units based on the weighted average number of shares of stock. % increase from 2019 and secure as they adapt to more fluid ways of working and learning with the of! Revenue decreased 9 % and windows OEM Pro revenue decreased 9 % and windows OEM revenue. Adverse conditions related to the financial health of, and business outlook for, the investee faster and gives! Java Platform enterprise Edition that competes with our enterprise-wide computing solutions to Factors! Non-Pro revenue grew 21 % is generally invoiced annually at microsoft revenue by segment beginning of contract.