Azure is a trusted cloud with comprehensive compliance coverage and AI-based security built in. In addition to poll and pulse surveys, we gain insights through onboarding and exit surveys, internal Yammer channels, employee Q&A sessions, and AskHR Service support. President and Vice Chair, Christopher C. Capossela We assumed responsibility for these claims in our agreement to acquire Nokias Devices and Services business and have been substituted for the Nokia defendants. 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. It drives our passion to obsess about our customers, and to learn about and from them. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Save for three of these 16 quarters, that YOY growth has ranged between roughly 20% and 35% a quarter . Microsoft annual revenue for 2020 was $143.015B, a 13.65% increase from 2019. Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 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. Customized manager learning to build people manager capabilities and similar learning solutions to build leadership skills for all employees including differentiated leadership development programs. 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. Archives of these events are also available. Credit losses relating to available-for-sale debt securities are recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. This share repurchase program commenced in December 2016 and was completed in February 2020. In June 2020, with tens of millions of people displaced from their jobs due to the pandemic, we brought resources together from across Microsoft, inclusive of LinkedIn and GitHub, to help 25 million people connect to the digital skills for in-demand roles. 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. The opportunity to merge the physical and digital worlds, when combined with the power of Azure cloud services, unlocks the potential for entirely new workloads and experiences which we believe will shape the next era of computing. The global pandemic has accelerated our capabilities and culture with respect to flexible work. Enterprise Agreements offer large organizations a manageable volume licensing program that gives them the flexibility to buy cloud services and software licenses under one agreement. $63.364 billion of Microsoft's $198.270 billion in fiscal year 2022 revenue came from the Productivity and Business Processes segment. 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. 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 must continue to evolve and adapt over an extended time in pace with this changing environment. We implemented a global Paid Pandemic School and Childcare Closure Leave to support working parents, added wellbeing days for those who needed to take time off for mental health and wellness, implemented on-demand COVID-19 testing and vaccinations on our Redmond, Washington campus, and extended full medical plan coverage for coronavirus testing, treatment, and telehealth services. It transforms how people connect holographically with others in a natural way. 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). New integrations between Dynamics 365 and Teams enable everyone across an organization to view and collaborate on customer records seamlessly within Teams, and to meet, chat, and collaborate within Dynamics 365. Dynamics revenue is driven by the number of users licensed and applications consumed, expansion of average revenue per user, and the continued shift to Dynamics 365, a unified set of cloud-based intelligent business applications, including Power Apps and Power Automate. Revenue, gross margin, and operating income included a favorable foreign currency impact of 2%, 3%, and 4%, respectively. In the next phase of innovation, computing is more powerful and ubiquitous from the cloud to the edge. 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. These obligations did not have a material impact in our consolidated financial statements during the periods presented. 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. These metrics provide strategic product insights which allow us to assess the performance across our commercial and consumer businesses. 10,610. us-gaap:OperatingIncomeLoss. The rise of hybrid work will be one of the most profound changes to the way people work in more than a century. SA is included. The federal and state net operating loss carryforwards will expire in various years from fiscal 2022 through 2041, if not utilized. In that division, server products and cloud services revenue increased 20 percent from a year ago, boosted by a 31 percent rise . In 2019 the growth curve flattened and brought almost $7 billion, and in 2020 the revenue was $8 billion. Former Executive Vice President and Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (SA). Our ecosystem of customers and partners has stepped up to help people and organizations in every country use technology to be resilient and transform during the most trying of circumstances. Azure faces diverse competition from companies such as Amazon, Google, IBM, Oracle, VMware, and open source offerings. And every day this past year, I have had the privilege to see it in action, as customers of every size, in every industry, in every part of the world use our platforms and tools to help address their own challenges and opportunities as well as those of their communities and society at-large. Our ambition for Windows 10 monetization opportunities includes gaming, services, subscriptions, and search advertising. We use metrics in assessing the performance of our business and to make informed decisions regarding the allocation of resources. 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. Income taxes paid, net of refunds, were $13.4 billion, $12.5 billion, and $8.4 billion in fiscal years 2021, 2020, and 2019, respectively. The second broad category of OEMs are system builders consisting of lower-volume PC manufacturers, which source Microsoft software for pre-installation and local redistribution primarily through the Microsoft distributor channel rather than through a direct agreement or relationship with Microsoft. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on the criteria established in Internal Control Integrated Framework (2013) issued by COSO. Net Recognized Gains (Losses) on Investments. Revenue, gross margin, and operating income included a favorable foreign currency impact of 3%, 3%, and 4%, respectively. 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. Highlights from fiscal year 2021 compared with fiscal year 2020 included: On March 9, 2021, we completed our acquisition of ZeniMax Media Inc. (ZeniMax), the parent company of Bethesda Softworks LLC, for a total purchase price of $8.1 billion, consisting primarily of cash. We are investing significant resources in: Our future growth depends on our ability to transcend current product category definitions, business models, and sales motions. None of the goodwill is expected to be deductible for income tax purposes. While the pandemic has been the defining issue of the past year-and-a-half, climate change is the challenge of our lifetime. We continued to pay hourly service providers such as cleaning and reception staff who may have otherwise been furloughed. The remaining transition tax of $13.6 billion is payable over the next five years with a final payment in fiscal year 2026. Satya Nadella Intercompany transactions and balances have been eliminated. This includes the server platform, database, business intelligence, storage, management and operations, virtualization, service-oriented architecture platform, security, and identity software. Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. 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. 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. In fiscal year 2021, the COVID-19 pandemic continued to impact our business operations and financial results. 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. Apple, Google, and Microsoft: revenue comparison 2008-2022; Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (SSP) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; stock-based compensation forfeiture rates; when technological feasibility is achieved for our products; the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns; and determining the timing and amount of impairments for investments. But our ability to make sense of data is growing more difficult as the volume, velocity, and variety expand. From time to time, we enter into broader cross-license agreements with other technology companies covering entire groups of patents. Microsoft 365 is empowering people and organizations to be productive and secure as they adapt to more fluid ways of working and learning. 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. Our skills initiative brings together learning resources, certification opportunities, and job-seeker tools from LinkedIn, GitHub, and Microsoft Learn, and is built on data insights drawn from LinkedIns Economic Graph. Certain income and expenses are not reported in tax returns and financial statements in the same year. Microsoft is committed to supporting our employees well-being and safety while they are at work and in their personal lives. Through this commitment we can allow everyone the chance to be their authentic selves and do their best work every day. Devices face competition from various computer, tablet, and hardware manufacturers who offer a unique combination of high-quality industrial design and innovative technologies across various price points. Our strategy requires continued investment in datacenters and other hybrid and edge infrastructure to support our services. Our gaming platform is designed to provide a variety of entertainment through a unique combination of content, community, and cloud. A companys internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements. You can also send mail to the transfer agent at: Shareholders can sign up for electronic alerts to access the annual report and proxy statement online. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. We record a receivable related to revenue recognized for multi-year on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. We report our financial performance based on the following segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Microsoft Corporation's quarterly revenue almost tripled within the last 12 years, increasing from 14.45 billion U.S. dollars in the third . 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11.04.2023