Microsoft's Intelligent Cloud revenue rose 18 percent to $21.5 billion, up from $18.2 billion one year ago. "Microsoft's Revenue from 2012 to 2022 Financial Years, by Segment (in Billion U.S. Tech as a percentage of total GDP will double from 5 to 10 percent by 2030. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. Continuing . Our gaming platform competes with console platforms from Nintendo and Sony, both of which have a large, established base of customers. We believe that our audit provides a reasonable basis for our opinion. Our revenue fluctuates quarterly and is generally higher in the second and fourth quarters of our fiscal year. 12,820. Microsoft Teams is enabling rapid digital transformation by giving people a single tool to chat, call, meet, and collaborate. 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. We describe risks and uncertainties that could cause actual results and events to differ materially in Risk Factors, Managements Discussion and Analysis of Financial Condition and Results of Operations, and Quantitative and Qualitative Disclosures about Market Risk in our fiscal year 2021 Form 10-K. Our employees donated an additional $214 million (including the company match) to the organizations and causes they care about. In fiscal year 2021, we closed our Microsoft Store physical locations and opened our Microsoft Experience Centers. Being a global-scale cloud, Azure uniquely offers hybrid consistency, developer productivity, AI capabilities, and trusted security and compliance. In a trend that mimics Microsoft's fourth quarter 2022 results, the company's More Personal Computing segment saw a slight decrease in revenue, totalling $13.3 billion. Xbox enables people to connect and share online gaming experiences that are accessible on Xbox consoles, Windows-enabled devices, and other devices. The remaining transition tax of $13.6 billion is payable over the next five years with a final payment in fiscal year 2026. Our devices are primarily manufactured by third-party contract manufacturers. Table Power BI. Microsoft Online Subscription Agreements are designed for small and medium organizations that want to subscribe to, activate, provision, and maintain cloud services seamlessly and directly via the web. The Board of Directors, through its Audit Committee, consisting solely of independent directors of the Company, meets periodically with management, internal auditors, and our independent registered public accounting firm to ensure that each is meeting its responsibilities and to discuss matters concerning internal controls and financial reporting. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. SA is included with certain volume licensing agreements and is an optional purchase with others. Given our focus on understanding core company beliefs and compliance topics, all employees complete required learning programs like Standards of Business Conduct, Privacy, Unconscious Bias, and preventing harassment courses. In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine the fair value of our financial instruments. We intend to request shareholder approval for a successor ESPP with a January 1, 2022 effective date and ten-year expiration of December 31, 2031 at our 2021 Annual Shareholders Meeting. We are accelerating our development of mixed reality solutions with new Azure services and devices. Our consolidated financial statements and accompanying notes are prepared in accordance with GAAP. We also license standalone and software development lifecycle tools for software architects, developers, testers, and project managers. As of June 30, 2021 and 2020, long-term accounts receivable, net of allowance for doubtful accounts, was $3.4 billion and $2.7 billion, respectively, and is included in other long-term assets in our consolidated balance sheets. ET. We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. There were 63 patent infringement cases pending against Microsoft as of June 30, 2021, none of which are material individually or in aggregate. The decrease in our effective tax rate for fiscal year 2021 compared to fiscal year 2020 was primarily due to tax benefits from the India Supreme Court decision on withholding taxes, an agreement between the U.S. and India tax authorities related to transfer pricing, final TCJA regulations, and an increase in tax benefits relating to stock-based compensation. 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). Operating income increased $7.8 billion or 43%. 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. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. A paid subscription is required for full access. You only have access to basic statistics. For those uncertain tax positions that had not been effectively settled, we evaluated whether management had appropriately considered new information that could significantly change the recognition, measurement or disclosure of the uncertain tax positions. Refer to Risk Factors in our fiscal year 2021 Form 10-K for a discussion of these factors and other risks. By combining the Internet of Things, AI, and mixed reality, this platform layer enables the creation of rich digital twin simulations of real-world processes, places, and things so organizations can monitor complex systems in real time, interact within them using mixed reality, and run simulations to model, analyze, and predict performance. 10,610. us-gaap:OperatingIncomeLoss. Judgment is required in determining when technological feasibility of a product is established. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. Cloud usage and demand benefited as customers accelerate their digital transformation priorities. $90.88. Were seeing our family of products play key roles in the ways the world is continuing to work, learn, and connect. To expand usage and deepen engagement, we continue to invest in content, community, and cloud services as we pursue the expansive opportunity in the gaming industry. Interest and dividends income decreased due to lower yields on fixed-income securities. Chairman and Chief Executive Officer The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. Dynamics products and cloud services revenue increased 25% driven by Dynamics 365 growth of 43%. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue. 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. 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. We continued to pay hourly service providers such as cleaning and reception staff who may have otherwise been furloughed. MSN advertising includes both native and display ads. Therefore, we recorded a net income tax benefit of $620 million in the third quarter of fiscal year 2021 to reflect the results of the India Supreme Court decision impacting fiscal year 1996 through fiscal year 2016. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. For derivative instruments designated as fair value hedges, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. We manage the average maturity of the fixed-income portfolio to achieve economic returns that correlate to certain global fixed-income indices. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Excluding this impact, gross margin percentage was relatively unchanged driven by gross margin percentage improvement in Azure, offset in part by sales mix shift to Azure. While we employ much of our internally-developed intellectual property exclusively in our products and services, we also engage in outbound licensing of specific patented technologies that are incorporated into licensees products. January 26, 2022, 12:36 PM EST. The components of lease expense were as follows: Supplemental cash flow information related to leases was as follows: Supplemental balance sheet information related to leases was as follows: The following table outlines maturities of our lease liabilities as of June 30, 2021: As of June 30, 2021, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $5.4 billion and $7.3 billion, respectively. AI is technologys most important priority, and healthcare is its most urgent application. 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. We strive to make computing more personal by putting people at the core of the experience, enabling them to interact with technology in more intuitive, engaging, and dynamic ways. In addition to the extraordinary steps and programs relating to COVID-19, our comprehensive benefits package includes many physical, emotional, and financial wellness programs including counseling through the Microsoft CARES Employee Assistance Program, flexible fitness benefits, savings and investment tools, adoption assistance, and back-up care for children and elders. 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. 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. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Through this commitment we can allow everyone the chance to be their authentic selves and do their best work every day. Microsoft Relationship Sales solution brings together LinkedIn Sales Navigator and Dynamics to transform business to business sales through social selling. Finally, Learning Solutions, including Glint, help businesses close critical skills gaps in times where companies are having to do more with existing talent. Our international operations provide a significant portion of our total revenue and expenses. Microsoft annual revenue for 2021 was $168.088B, a 17.53% increase from 2020. And, finally, our comprehensive portfolio of AI tools, frameworks, and infrastructure enables developers to build solutions that comprehend speech, make predictions, provide insights, and support decision-making. More Personal Computing revenue increased driven by Gaming. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of ZeniMax. Use Ask Statista Research Service, On April 25, 2014, Microsoft completed the transaction to acquire substantially all of Nokia Corporations Devices and Services Business (NDS). A year later, 2022 Q4 concluded with a gross profit margin of 24%, an improvement of over 800 basis points. STATEMENT OF MANAGEMENTS RESPONSIBILITY FOR FINANCIAL STATEMENTS. Chief Executive Officer, The financial results of ZeniMax have been included in our consolidated financial statements since the date of the acquisition. We repurchased the following shares of common stock under the share repurchase programs: Shares repurchased during fiscal year 2021 and the fourth quarter of fiscal year 2020 were under the share repurchase program approved on September 18, 2019. Founder, Chief Executive Officer and Microsofts Board of Directors provides insight, feedback, and oversight across a broad range of environmental and social matters. Gross margin increased $6.5 billion or 18% driven by growth in Office 365 Commercial and LinkedIn, and the change in estimated useful lives of our server and network equipment. Apple and Microsoft are both great companies to own. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. To the extent we fail to meet these requirements, we will be required to post collateral, similar to the standard convention related to over-the-counter derivatives. Through our Democracy Forward Program, were working across sectors to safeguard electoral processes and defend against disinformation. Billionaires like Microsoft Corp. co-founder Bill Gates likely saw an opportunity through . GitHub provides a collaboration platform and code hosting service for developers. Our cloud business benefits from three economies of scale: datacenters that deploy computational resources at significantly lower cost per unit than smaller ones; datacenters that coordinate and aggregate diverse customer, geographic, and application demand patterns, improving the utilization of computing, storage, and network resources; and multi-tenancy locations that lower application maintenance labor costs. Office Consumer, including Microsoft 365 Consumer subscriptions and Office licensed on-premises, and Office Consumer Services, including Skype, Outlook.com, and OneDrive. Our managers strive to model our culture and values in their actions, to coach their teams to define objectives and adapt and learn, and to care deeply for their employees, seeking to understand their capabilities, ambitions, and invest in their growth. The lawsuits also allege an industry-wide conspiracy to manipulate the science and testing around emission guidelines. GlaxoSmithKline, Hugh F. Johnston 1 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. 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. All deferred income taxes are classified as long-term in our consolidated balance sheets. This is why we introduced Microsoft Viva, which brings the information, resources, and support employees need to stay connected to each other and their companys mission directly into the flow of work. Growth depends on our ability to reach new users, add value to our core product set, and continue to expand our product and service offerings into new markets. Open agreements are designed for small and medium organizations that want to license cloud services and on-premises software over a one- to three-year period. Our web application platform software competes with open source software such as Apache, Linux, MySQL, and PHP. Awards that expire or are canceled without delivery of shares generally become available for issuance under the plans. President and Chief Financial Officer, Microsoft's revenue 2008-2023, by fiscal quarter. Last year, we intercepted 30 billion email threats and 31 billion authentication attacks. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Dollars). Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (SA). Our devices are primarily manufactured by third-party contract manufacturers, some of which contain certain components for which there are very few qualified suppliers. Activity in the allowance for doubtful accounts was as follows: Allowance for doubtful accounts included in our consolidated balance sheets: We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. We will continue to invest in sales, marketing, product support infrastructure, and existing and advanced areas of technology, as well as continue making acquisitions that align with our business strategy. 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. Microsoft just announced its results for FY22 Q4, which ended on June 30, 2022. Business Solutions including all features. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file that material with or furnish it to the Securities and Exchange Commission (SEC) at www.sec.gov. As of June 30, 2021 and 2020, our financing receivables, net were $4.4 billion and $5.2 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. The devices and form factors customers prefer evolve rapidly, and influence how users access services in the cloud, and in some cases, the users choice of which suite of cloud-based services to use. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Vice Chairman and Executive Vice Profit from the additional features of your individual account. The components of intangible assets acquired during the periods presented were as follows: Intangible assets amortization expense was $1.6 billion, $1.6 billion, and $1.9 billion for fiscal years 2021, 2020, and 2019, respectively. Get in touch with us now. Adjusted net income and adjusted diluted earnings per share (EPS) are non-GAAP financial measures which exclude tax benefits related to an India Supreme Court decision on withholding taxes in fiscal year 2021. Time: 8:30 a.m. Pacific Time The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing consolidated financial statements and maintaining accountability for assets. Open agreements are a simple, cost-effective way to acquire the latest Microsoft technology. We believe potential can be nurtured and is not pre-determined, and we should always be learning and curious trying new things without fear of failure. Xbox hardware revenue increased 92% driven by higher price of consoles sold due to the Xbox Series X|S launches. Metrics related to our More Personal Computing segment assess the performance of key lines of business within this segment. Operating expenses increased $839 million or 5% driven by investments in commercial sales, cloud engineering, and LinkedIn. Li Auto's pure EV lineup, which will come later, will also be priced in a range of 200,000 yuan to 500,000 yuan, Li added. Property and equipment is stated at cost less accumulated depreciation, and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. To foster their and our success, we seek to create an environment where people can do their best work a place where they can proudly be their authentic selves, guided by our values, and where they know their needs can be met. Directly accessible data for 170 industries from 50 countries and over 1 million facts: Get quick analyses with our professional research service. Celanese Corporation CE reported earnings from continuing operations of $7.03 per share in the fourth quarter of 2022, up 46% from . We manage the average maturity of our fixed-income portfolio to achieve economic returns that correlate to certain broad-based fixed-income indices using exchange-traded option and futures contracts and over-the-counter swap and option contracts. Intercompany transactions and balances have been eliminated. And Microsoft Mesh enables developers to build immersive, multiuser, cross-platform mixed reality apps. As a result, no collateral was required to be posted. Our Internet address is www.microsoft.com. GitHub is reported as part of our Intelligent Cloud segment. Our growth depends on securely delivering continuous innovation and advancing our leading productivity and collaboration tools and services, including Office, Dynamics, and LinkedIn. 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. We use a single amount to estimate SSP for items that are not sold separately, including on-premises licenses sold with SA or software updates provided at no additional charge. The provision for income taxes for fiscal years 2021, 2020, and 2019 included interest expense related to uncertain tax positions of $274 million, $579 million, and $515 million, respectively, net of income tax benefits. Nuance is a cloud and artificial intelligence (AI) software provider with healthcare and enterprise AI experience, and the acquisition will build on our industry-specific cloud offerings. The largest component of the OEM business is the Windows operating system pre-installed on devices. Timing of revenue recognition may differ from the timing of invoicing to customers. For Microsoft, trust is built on privacy, security, digital safety, the responsible use of AI, and transparency. Acquisition Blizzard. We distribute our devices through third-party retailers. And we continue to make our technology affordable and accessible to nonprofit organizations around the world. Securities held in our equity investments portfolio are subject to price risk. Cash used in financing increased $2.5 billion to $48.5 billion for fiscal year 2021, mainly due to a $4.4 billion increase in common stock repurchases and a $1.4 billion increase in dividends paid, offset in part by a $1.8 billion decrease in repayments of debt and a $1.7 billion decrease in cash premium paid on debt exchange. 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. Analysts had expected a 41.4% growth in Azure, according to consensus data from . Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our consolidated financial statements; providing reasonable assurance that receipts and expenditures of company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use, or disposition of company assets that could have a material effect on our consolidated financial statements would be prevented or detected on a timely basis. In fiscal year 2021, the COVID-19 pandemic continued to impact our business operations and financial results. Corporate Vice President and Chief Accounting Officer. The Automotive Voice Command System market size, estimations, and forecasts are provided in terms of and revenue (USD millions), considering 2023 as the base year, with history and forecast data . Executive Vice President, Human Resources. Their revenue came in at 25,007 Million USD, which missed the expected amount by around 5% but represented a 13% increase YoY. In fiscal years 2021, 2020, and 2019, there were no individually significant other reconciling items. We monitor our foreign currency exposures daily to maximize the economic effectiveness of our foreign currency positions, including hedges. Other news and announcements that we may post from time to time that investors might find useful or interesting. Microsoft expects More Personal Computing revenue to rise to between $13.6 billion and $14.0 billion in Q4 FY 2021. Judgment is required to determine the stand-alone selling price (SSP) for each distinct performance obligation. Excluding this impact, gross margin percentage decreased slightly driven by a sales mix shift to cloud offerings, on a low prior year comparable impacted by increased usage. $ 42,959. On-the-job stretch and advancement opportunities. Download as image Embed. ZeniMax is reported as part of our More Personal Computing segment. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. We may also purchase or license technology that we incorporate into our products and services. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. Access to this and all other statistics on 80,000 topics from, Show sources information If you are an admin, please authenticate by logging in again. We operate our business and report our financial performance using three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Azure Synapse brings together data integration, data warehousing, and big data analytics so organizations can query data on their own terms at any scale. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months. Operating income increased $17.0 billion or 32% driven by growth across each of our segments and the change in estimated useful lives of our server and network equipment. The company's Xbox Game Pass gaming subscription revenue during the year was . These manufacturers, many of which are also current or potential partners and customers, include Apple and our Windows OEMs. 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. Artificial intelligence (AI) capabilities are rapidly advancing, fueled by data and knowledge of the world. Our cloud and AI services and datacenters help businesses cut energy consumption, reduce physical footprints, and design sustainable products. Microsoft. On April 11, 2021, we entered into a definitive agreement to acquire Nuance Communications, Inc. (Nuance) for $56.00 per share in an all-cash transaction valued at $19.7 billion, inclusive of Nuances net debt. Employees purchased the following shares during the periods presented: As of June 30, 2021, 88 million shares of our common stock were reserved for future issuance through the ESPP. 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