microsoft revenue by segment

These contracts are not designated as hedging instruments and are included in Other contracts in the tables below. And with our pending acquisition of Nuance Communications, well provide ambient clinical intelligence capabilities for healthcare organizations that improve the patient experience and reduce the overwhelming burden of work that physicians struggle with today. For hardware warranties, we estimate the costs based on historical and projected product failure rates, historical and projected repair costs, and knowledge of specific product failures (if any). Office Commercial products and cloud services revenue growth, Revenue from Office Commercial products and cloud services (Office 365 subscriptions, the Office 365 portion of Microsoft 365 Commercial subscriptions, and Office licensed on-premises), comprising Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business, Office Consumer products and cloud services revenue growth, Revenue from Office Consumer products and cloud services, including Microsoft 365 Consumer subscriptions and Office licensed on-premises, The number of Office 365 Commercial seats at end of period where seats are paid users covered by an Office 365 Commercial subscription, The number of Microsoft 365 Consumer (formerly Office 365 Consumer) subscribers at end of period, Dynamics products and cloud services We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. And we continue to make our technology affordable and accessible to nonprofit organizations around the world. 18,327. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. Oct 14, 2022. We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. With Azure Mixed Reality Services, digital information can be represented within the context of the three-dimensional world we live in. 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. We strive to include others by holding ourselves accountable for diversity, driving global systemic change in our workplace and workforce, and creating an inclusive work environment. We distribute our devices through third-party retailers. Price Quote as of 2/17/2023 4:00:00 PM - ET. Although we were not a party to the appeals, our software sales in India were determined to be not subject to withholding taxes. The components of other income (expense), net were as follows: We use derivative instruments to manage risks related to foreign currencies, equity prices, interest rates, and credit; enhance investment returns; and facilitate portfolio diversification. We are building a Planetary Computer to help manage and protect Earths natural systems. Our goal is to foster innovation that generates new ecosystems of inventors, partners, developers, creators, changemakers, public servants, frontline workers, and knowledge workers who, together, drive the engines of growth and opportunity in ways that benefit everyone. 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. Service and other revenue also includes sales from online advertising and LinkedIn. Show publisher information As of June 30, 2021, our long-term unsecured debt rating was AAA, and cash investments were in excess of $1.0 billion. 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. Are you interested in testing our business solutions? We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise. Opportunities to sign up for email alerts to have information pushed in real time. The primary drag on earnings was the 19% decrease down to $14.2B the company saw in it's personal computing segment with Windows OEM license revenue falling a massive 39%. Commercial cloud gross margin percentage increased 4 points to 71% driven by gross margin percentage improvement in Azure and the change in estimated useful lives of our server and network equipment, offset in part by sales mix shift to Azure. Timing of revenue recognition may differ from the timing of invoicing to customers. We read and evaluated managements documentation, including relevant accounting policies and information obtained by management from outside tax specialists, that detailed the basis of the uncertain tax positions. The credit risk and average maturity of our fixed-income portfolio are managed to achieve economic returns that correlate to certain fixed-income indices. Sales and marketing expenses increased $519 million or 3% driven by investments in commercial sales, offset in part by a reduction in bad debt expense. Refer to Note 16 Stockholders Equity of the Notes to Financial Statements for further discussion. In October 2016, the Court of Appeals issued its decision adopting the standard advocated by the defendants and remanding the cases to the trial court for further proceedings under that standard. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. China State Administration for Market Regulation Investigation. The resolution of each of these audits is not expected to be material to our consolidated financial statements. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Our gaming platform competes with console platforms from Nintendo and Sony, both of which have a large, established base of customers. 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. Xbox and our cloud gaming services face competition from various online gaming ecosystems and game streaming services, including those operated by Amazon, Apple, Facebook, Google, and Tencent. Our effective tax rate was lower than the U.S. federal statutory rate, 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, tax benefits relating to stock-based compensation, and tax benefits from the India Supreme Court decision on withholding taxes. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Commercial remaining performance obligation, Commercial portion of revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, Revenue from our commercial cloud business, which includes Azure, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, Gross margin percentage for our commercial cloud business, Productivity and Business Processes and Intelligent Cloud. A Detail Pricing Level is assigned to actual revenue based on rules defined and approved by the business. We are exposed to economic risk from foreign exchange rates, interest rates, credit risk, and equity prices. The adoption of the standard did not have a material impact on our consolidated financial statements. Revenue increased $25.1 billion or 18% driven by growth across each of our segments. Our web application platform software competes with open source software such as Apache, Linux, MySQL, and PHP. 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. We evaluated managements significant accounting policies related to these customer agreements for reasonableness. GlaxoSmithKline, Hugh F. Johnston 1 Business Solutions including all features. In our rapidly changing digital economy, people need a platform where they can acquire new skills, expand their networks, and connect with employers. Furthermore, we shared a commitment to transparency by subjecting the data in our annual sustainability report to third-party review and to accountability by including progress on sustainability goals as a factor in determining executive pay. Commercial cloud revenue was up 33% over last year. 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. Access to this and all other statistics on 80,000 topics from, Show sources information Recent Accounting Guidance Not Yet Adopted. Microsoft 365 is empowering people and organizations to be productive and secure as they adapt to more fluid ways of working and learning. The COVID-19 pandemic may continue to impact our business operations and financial operating results, and there is uncertainty in the nature and degree of its continued effects over time. Changes to our estimated variable consideration were not material for the periods presented. Reality Labs' total loss for 2022 came in . Revenue growth was led by its search segment . CALs provide access rights to certain server products, including SQL Server and Windows Server, and revenue is reported along with the associated server product. 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. Search advertising revenue, excluding traffic acquisition costs, increased 13%. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Microsoft generated $51.728 billion in revenue during Q2 2022, across the following three segments. Net income fell 12% to . Microsoft Viva is an employee experience platform that brings together communications, knowledge, learning, resources, and insights powered by Microsoft 365. We adopted the standard effective July 1, 2020. At Microsoft, were providing technology and resources to help our customers navigate a remote environment. To achieve our vision, our research and development efforts focus on three interconnected ambitions: Reinvent Productivity and Business Processes. LinkedIn and our security business both passed $10 billion in annual revenue for the first time. 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. Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by original equipment manufacturers (OEM), to drive traffic to our websites, and to acquire online advertising space; costs incurred to support and maintain online products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Date: Tuesday, November 30, 2021 The AeroTech segment's revenues are expected to increase 10-13% from that reported in 2022. . In-the-classroom learning, learning pods, our early-in-career Aspire program, and manager excellence communities. A large network of partner advisors support many of these sales. We are focused on building capabilities to support a variety of workstyles where individuals, teams, and our business can be successful. 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. All differences between our internal management reporting basis and accounting principles generally accepted in the United States of America (GAAP), along with certain corporate-level and other activity, are included in Corporate and Other. We have several partnerships with other companies, including Verizon Media Group, through which we provide and monetize search queries. Our intangible assets are subject to amortization and are amortized using the straight-line method over their estimated period of benefit, ranging from one to 20 years. We are continuing our efforts to extend broadband access to millions of people in rural and underserved communities in the United States and around the globe. And Microsoft Mesh enables developers to build immersive, multiuser, cross-platform mixed reality apps. The investments we are making in infrastructure and devices will continue to increase our operating costs and may decrease our operating margins. As a Premium user you get access to background information and details about the release of this statistic. The bottom . Our sales force performs a variety of functions, including working directly with commercial enterprises and public-sector organizations worldwide to identify and meet their technology and digital transformation requirements; managing OEM relationships; and supporting system integrators, independent software vendors, and other partners who engage directly with our customers to perform sales, consulting, and fulfillment functions for our products and services. SA is included with certain volume licensing agreements and is an optional purchase with others. We evaluated the reasonableness of managements estimates by considering how tax law, including statutes, regulations and case law, impacted managements judgments. ZeniMax is reported as part of our More Personal Computing segment. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Our CSR Reports Hub provides detailed information on law enforcement access to data, our environmental data, our political activities, our workforce demographics, and our human rights work. Cloud usage and demand benefited as customers accelerate their digital transformation priorities. Basic earnings per share (EPS) is computed based on the weighted average number of shares of common stock outstanding during the period. In December 2019, the FASB issued a new standard to simplify the accounting for income taxes. We estimate that we have no significant residual value related to our intangible assets. However, just like how . While it may be necessary in the future to seek or renew licenses relating to various aspects of our products, services, and business methods, we believe, based upon past experience and industry practice, such licenses generally can be obtained on commercially reasonable terms. During fiscal years 2021 and 2020, we repurchased 101 million shares and 126 million shares of our common stock for $23.0 billion and $19.7 billion, respectively, through our share repurchase programs. 118. This report includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. 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 Microsoft Cloud Solution Provider program offers customers an easy way to license the cloud services they need in combination with the value-added services offered by their systems integrator, managed services provider, or cloud reseller partner. Adjustments to reconcile net income to net cash from operations: Net recognized gains on investments and derivatives. Windows, including Windows OEM licensing (Windows OEM) and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows IoT; and MSN advertising. On September 18, 2019, our Board of Directors approved a share repurchase program authorizing up to $40.0 billion in share repurchases. Resources, and insights powered by microsoft 365 is empowering people and organizations be! Earnings per share ( EPS ) is computed based on rules defined and approved by the.. More fluid ways of working and learning terms may include options to extend or terminate the when... Reality apps managements judgments our more Personal Computing segment workstyles where individuals, teams and. 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