Microsoft MSFT annual report 2024

Microsoft MSFT annual report 2024

@financepresentations
@financepresentations
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6 days ago 59

Microsoft MSFT annual report 2024

@financepresentations6 days ago

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Dear shareholders, colleagues, customers, and partners:
Fiscal year 2024 was a pivotal year for…
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reasoning and planning capabilities that help us understand complex context, complete end-to-end…
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staying in their flow and bringing the joy back to coding. This year, we also introduced Copilot…
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skills informed by our threat intelligence and 78 trillion daily security signals to provide sec…
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How can we expand opportunity? 
We are democratizing access to AI and the skills needed to harn…
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Over the past year, as regulators increasingly required greater transparency and process consist…
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capability, we need a culture that allows us to grow that capability long before it is conventio…
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ISSUER PURCHASES OF EQUITY SECURITIES, DIVIDENDS, AND STOCK PERFORMANCE 
MARKET AND STOCKHOLDER…
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STOCK PERFORMANCE 
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* 
Among Microsoft Corporation,…
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Note About Forward-Looking Statements 
This report includes estimates, projections, statements…
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The Ambitions That Drive Us 
To achieve our vision, our research and development efforts focus…
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Copilot stack for Microsoft, enterprises, and developers. Organizations large and small are dep…
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Our Future Opportunity 
We are focused on helping customers use the breadth and depth of the M…
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Addressing Racial Injustice and Inequity 
In June 2020, we outlined a series of multi-year com…
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As of June 30, 2024, we employed approximately 228,000 people on a full-time basis, 126,000 in …
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Office Commercial 
Office Commercial is designed to increase personal, team, and organizationa…
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powerful, flexible, secure, integrated industry-specific, and easy-to-use productivity and coll…
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server solutions, Microsoft desktop solutions, and Nuance conversational AI and ambient intelli…
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Windows 
The Windows operating system is designed to deliver a more personal computing experie…
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Xbox enables people to connect and share online gaming experiences that are accessible on Xbox …
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RESEARCH AND DEVELOPMENT 
Product and Service Development, and Intellectual Property 
We deve…
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Investing in the Future 
Our success is based on our ability to create new and compelling prod…
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reach small and medium organizations. ESAs are also typically authorized as LSPs and operate as…
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Microsoft Products and Services Agreement 
Microsoft Products and Services Agreements are desi…
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obligations, such as with the creation of independent compliance functions required by the Euro…
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS 
The f…
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Industry Trends 
Our industry is dynamic and highly competitive, with frequent changes in both…
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Reportable Segments 
We report our financial performance based on the following segments: Prod…
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Productivity and Business Processes and Intelligent Cloud 
Metrics related to our Productivity…
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More Personal Computing 
Metrics related to our More Personal Computing segment assess the per…
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Gross margin increased $25.0 billion or 17% driven by growth across each of our segments. 
• G…
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Operating income increased $6.4 billion or 19%. 
• Gross margin increased $6.5 billion or 12% …
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OPERATING EXPENSES 
Research and Development 
(In millions, except percentages) 2024 2023
Pe…
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OTHER INCOME (EXPENSE), NET 
The components of other income (expense), net were as follows: 
…
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Uncertain Tax Positions 
We remain under audit by the IRS for tax years 2014 to 2017. With res…
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Cash, Cash Equivalents, and Investments 
Cash, cash equivalents, and short-term investments to…
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payments for other offerings for which we have been paid in advance and earn the revenue when w…
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Share Repurchases 
During fiscal years 2024 and 2023, we repurchased 32 million shares and 69 …
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In instances where SSP is not directly observable, such as when we do not sell the product or s…
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Research and Development Costs 
Costs incurred internally in researching and developing a comp…
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STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS 
Management is responsible f…
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
RISKS 
We are exposed to economic…
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 
INCOME STATEMENTS 
(In millions, except per shar…
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COMPREHENSIVE INCOME STATEMENTS 
(In millions)
Year Ended June 30, 2024 2023 2022
Net income…
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BALANCE SHEETS 
(In millions)
June 30, 2024 2023
Assets
Current assets:
Cash and cash equi…
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CASH FLOWS STATEMENTS 
(In millions)
Year Ended June 30, 2024 2023 2022
Operations
Net inco…
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STOCKHOLDERS’ EQUITY STATEMENTS 
(In millions, except per share amounts)
Year Ended June 30, …
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NOTES TO FINANCIAL STATEMENTS 
NOTE 1 — ACCOUNTING POLICIES 
Accounting Principles 
Our cons…
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Revenue Recognition 
Revenue is recognized upon transfer of control of promised products or se…
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additional charge. We use a range of amounts to estimate SSP when we sell each of the products …
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Activity in the allowance for doubtful accounts was as follows:
(In millions)
Year Ended June…
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include parts and labor over a period generally ranging from 90 days to three years. For softwa…
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credit losses, we employ a systematic methodology that considers available quantitative and qua…
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• Level 3 – inputs are generally unobservable and typically reflect management’s estimates of a…
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Intangible Assets 
Our intangible assets are subject to amortization and are amortized over th…
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NOTE 2 — EARNINGS PER SHARE 
Basic earnings per share (“EPS”) is computed based on the weighte…
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Net recognized gains (losses) on equity investments were as follows: 
(In millions)
Year Ende…
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(In millions)
Fair Value
Level
Adjusted
Cost Basis
Unrealized
Gains
Unrealized
Losses
…
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Unrealized Losses on Debt Investments 
Debt investments with continuous unrealized losses for …
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Foreign Currencies 
Certain forecasted transactions, assets, and liabilities are exposed to fo…
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The following table presents the notional amounts of our outstanding derivative instruments mea…
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The following table presents the fair value of our derivatives instruments on a gross basis: 
…
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NOTE 7 — PROPERTY AND EQUIPMENT 
The components of property and equipment were as follows: 
(…
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Following are the details of the purchase price allocated to the intangible assets acquired: 
…
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(a) Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to incr…
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NOTE 10 — INTANGIBLE ASSETS 
The components of intangible assets, all of which are finite-live…
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NOTE 11 — DEBT 
Short-term Debt 
As of June 30, 2024, we had $6.7 billion of commercial paper…
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The following table outlines maturities of our long-term debt, including the current portion, a…
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Effective Tax Rate 
The items accounting for the difference between income taxes computed at t…
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The components of the deferred income tax assets and liabilities were as follows: 
(In million…
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Uncertain Tax Positions 
Gross unrecognized tax benefits related to uncertain tax positions as…
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NOTE 13 — UNEARNED REVENUE 
Unearned revenue by segment was as follows: 
(In millions)
June …
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Supplemental balance sheet information related to leases was as follows: 
(In millions, except…
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NOTE 15 — CONTINGENCIES 
U.S. Cell Phone Litigation 
Microsoft Mobile Oy, a subsidiary of Mic…
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NOTE 16 — STOCKHOLDERS’ EQUITY 
Shares Outstanding 
Shares of common stock outstanding were a…
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Dividends 
Our Board of Directors declared the following dividends: 
Declaration Date Record …
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NOTE 18 — EMPLOYEE STOCK AND SAVINGS PLANS 
We grant stock-based compensation to employees and…
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Employee Stock Purchase Plan 
We have an ESPP for all eligible employees. Shares of our common…
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Intelligent Cloud 
Our Intelligent Cloud segment consists of our public, private, and hybrid s…
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No sales to an individual customer or country other than the United States accounted for more t…
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
To the Stockholders and the Board of …
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Significant judgment is exercised by the Company in determining revenue recognition for certain…
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How the Critical Audit Matter Was Addressed in the Audit 
Our principal audit procedures to ev…
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- Developing a range of independent estimates and comparing those to the discount rates selecte…
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
FINANCIAL DISCLOSURE 
Not ap…
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
To the Stockholders and the Board of …
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Because of its inherent limitations, internal control over financial reporting may not prevent …
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DIRECTORS AND EXECUTIVE OFFICERS OF MICROSOFT CORPORATION 
DIRECTORS 
Satya Nadella
Chairman…
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INVESTOR RELATIONS 
Investor Relations 
You can contact Microsoft Investor Relations by calli…
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