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MSFT · MICROSOFT CORP

33 filings

10-K

MSFT 10-K Annual Reports

MICROSOFT CORP - 33 annual reports

Filing record · 2016–202610-K1110-Q328-K106

2026
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2026
Microsoft Corporation's (MSFT) fiscal year 2026 performance demonstrates robust growth, primarily driven by its Intelligent Cloud segment, which saw a 30% revenue increase, largely fueled by Azure's 41% surge. The Productivity and Business Processes segment also performed strongly, with a 16% revenue uplift, notably from Microsoft 365 Commercial and Consumer cloud services showing significant growth. The company continues its aggressive investment in Artificial Intelligence (AI), integrating AI capabilities across its product portfolio, including Microsoft 365 Copilot and Azure AI offerings. This strategic focus on AI, coupled with strong cloud adoption, positions Microsoft for continued expansion. Despite a slight decrease in the More Personal Computing segment, mainly due to a decline in Xbox content and services and hardware sales, the company's overall revenue grew by a solid 18%, reaching $331.8 billion. Microsoft also returned substantial capital to shareholders through share repurchases and dividends, underscoring its commitment to shareholder value.
Jul 29, 2026
2025
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2025
Microsoft Corporation's (MSFT) 2025 10-K filing highlights robust growth driven by its cloud offerings and strategic AI integration. The company reported a significant 15% increase in total revenue to $281.7 billion, fueled by a 23% surge in Microsoft Cloud revenue, reaching $168.9 billion. This growth was propelled by strong performance in Azure and other cloud services, which saw a 34% revenue increase, and solid contributions from Microsoft 365 Commercial cloud services. The company's strategic focus on AI is evident across its product portfolio, aiming to enhance productivity and enable new business processes. Despite substantial investments in AI infrastructure and ongoing R&D, Microsoft demonstrated strong profitability with a 17% increase in operating income. The company continues to return capital to shareholders through share repurchases and dividends, underscoring its commitment to shareholder value. The acquisition of Activision Blizzard also significantly bolstered the Gaming segment, contributing to the overall positive financial trajectory. Microsoft's diversified business segments and continuous innovation in areas like AI position it for sustained growth, though it also navigates a complex and competitive technological landscape and evolving regulatory environment.
Jul 30, 2025
2024
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2024
Microsoft Corporation's (MSFT) 10-K filing for the fiscal year ended June 30, 2024, highlights robust growth, particularly in its cloud and AI offerings, signaling a strong trajectory fueled by digital transformation and artificial intelligence. The company reported significant revenue increases across its segments, with Intelligent Cloud revenue growing 20% driven by Azure, and Productivity and Business Processes revenue up 12%, bolstered by Office 365 Commercial. The More Personal Computing segment saw a 13% revenue increase, notably boosted by the Activision Blizzard acquisition contributing to Gaming revenue growth. Microsoft continues to invest heavily in AI infrastructure and innovation, integrating AI across its product portfolio, which is expected to drive future growth and enhance customer value. The company's financial health remains strong, with substantial cash flows from operations and a commitment to returning capital to shareholders through dividends and share repurchases, alongside strategic investments in datacenter expansion and AI capabilities.
Jul 30, 2024
2023
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2023
Microsoft Corporation's 10-K filing for the fiscal year ended June 29, 2023, highlights robust performance driven by its Intelligent Cloud segment, which saw a 17% revenue increase to $87.9 billion, largely propelled by Azure and other cloud services growing at 29%. The Productivity and Business Processes segment also demonstrated strength, with revenue up 9% to $69.3 billion, fueled by Office 365 Commercial and LinkedIn. The More Personal Computing segment experienced a 9% revenue decline to $54.7 billion, primarily due to decreases in Windows OEM licensing and device sales, though search and news advertising saw an increase. The company emphasizes its commitment to AI, integrating it across its product portfolio, and is strategically investing in cloud infrastructure to meet growing demand. Financially, Microsoft reported total revenue of $211.9 billion, a 7% increase year-over-year. Operating income rose 6% to $88.5 billion, while net income saw a slight decrease of 1% to $72.4 billion. The company returned significant capital to shareholders through $18.4 billion in share repurchases and $20.2 billion in dividends during fiscal year 2023. Key strategic initiatives include consolidating office space to optimize costs and continuing investments in key growth areas like AI and cloud computing, even as they navigate economic uncertainties and competitive pressures.
Jul 27, 2023
2022
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2022
Microsoft Corporation's fiscal year 2022 (ending June 30, 2022) 10-K filing highlights a year of robust growth driven by its cloud offerings, particularly Azure. Total revenue increased by 18% to $198.3 billion, with Microsoft Cloud revenue surging 32% to $91.2 billion. This growth was broad-based across segments, with Intelligent Cloud revenue up 25%, Productivity and Business Processes up 18%, and More Personal Computing up 10%. The company continued its strategic focus on digital transformation, artificial intelligence, and hybrid work environments. Significant investments were made in cloud engineering, gaming, and LinkedIn. The acquisition of Nuance Communications for $18.8 billion in March 2022 further bolstered its AI and industry-specific cloud capabilities. Microsoft also announced its intent to acquire Activision Blizzard for $68.7 billion, signaling a major expansion into the gaming sector. The company returned significant capital to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value. While the company experienced strong financial performance, it also faces ongoing risks related to intense competition, cybersecurity threats, evolving technologies, and regulatory scrutiny in various markets. Management expressed confidence in its ability to fund operations and commitments through existing cash flows and access to capital markets.
Jul 28, 2022
2021
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2021
Microsoft Corporation's (MSFT) fiscal year 2021 10-K filing reveals a strong performance driven by its cloud offerings and diversified product portfolio. The company reported significant revenue growth across all segments, with Intelligent Cloud, Productivity and Business Processes, and More Personal Computing all contributing positively. This growth was fueled by strong demand for Azure services, Office 365 Commercial, and the gaming segment, bolstered by strategic acquisitions like ZeniMax Media. Financially, Microsoft demonstrated robust growth in revenue, gross margin, operating income, and net income. The company's strategic shift towards cloud-based services continues to yield strong results, evidenced by the substantial increase in commercial cloud revenue. Microsoft also returned significant capital to shareholders through share repurchases and dividends, underscoring its financial health and commitment to shareholder value. The company remains focused on innovation, particularly in AI and cloud computing, while managing operational and cybersecurity risks.
Jul 29, 2021
2020
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2020
Microsoft's 10-K filing for the fiscal year ended June 30, 2020, highlights robust revenue growth across all segments, driven by strong performance in cloud services, particularly Azure, which saw a 56% increase. The company's mission to empower every person and organization is being realized through its strategic focus on the intelligent cloud and intelligent edge, with significant investments in AI and mixed reality. Despite facing intense competition and the ongoing impacts of the COVID-19 pandemic, Microsoft demonstrated resilience, with total revenue reaching $143 billion. The company returned significant capital to shareholders through share repurchases and dividends, underscoring its commitment to shareholder value while continuing to invest heavily in research and development to drive future innovation.
Jul 30, 2020
2019
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2019
Microsoft Corporation's (MSFT) 2019 10-K filing showcases a year of robust growth, driven by its strategic focus on the intelligent cloud and intelligent edge. The company reported significant increases in revenue, gross margin, and operating income, reflecting strong performance across all three of its reporting segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Key growth drivers included a substantial 43% surge in commercial cloud revenue, powered by Azure and Office 365 Commercial. The acquisition of GitHub further bolstered the Intelligent Cloud segment. The company also saw healthy growth in its More Personal Computing segment, with strong performance from Surface devices and Xbox gaming. Microsoft continues to invest heavily in research and development, particularly in cloud and AI, positioning itself for future innovation and sustained growth in an evolving technology landscape.
Aug 1, 2019
2018
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2018
Microsoft's fiscal 2018 10-K (year ended June 30, 2018) shows a business that grew revenue 14% to $110.4 billion and operating income 21% to $35.1 billion, with growth across all three segments. The headline GAAP net income decline to $16.6 billion (down 35%, diluted EPS $2.13) is driven by a one-time $13.7 billion net charge from the Tax Cuts and Jobs Act. Excluding that charge and prior-year restructuring, adjusted net income rose 18% to $30.3 billion and adjusted diluted EPS rose 18% to $3.88. Investors should treat the adjusted figures as the better read on underlying operating momentum, while recognizing that the TCJA estimate is provisional and could still move. Growth was led by the cloud. Commercial cloud revenue rose 56% to $23.2 billion, Azure grew 91%, and Office 365 commercial grew 41%. Intelligent Cloud gross margin improved by about 7 percentage points in commercial cloud, though management warned that heavy infrastructure and cloud engineering investment will continue to pressure operating margins. LinkedIn contributed $5.3 billion in revenue but still posted an operating loss of $987 million, including $1.5 billion of intangible amortization, which highlights the cost of its acquisition. Balance sheet and cash flow remain strong. Cash, equivalents, and short-term investments were $133.8 billion against $76.2 billion of long-term debt, and operating cash flow reached $43.9 billion. Capital returned to shareholders included $12.7 billion in dividends and $8.6 billion in buybacks. The company also has a $17.6 billion transition tax payable over eight years and a pending $7.5 billion all-stock acquisition of GitHub, which is expected to close by calendar year-end 2018.
Aug 3, 2018
2017
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2017
Microsoft's fiscal 2017 10-K (year ended June 30, 2017) shows a company in transition: revenue rose 5% to $89.95 billion and operating income rose 11% to $22.3 billion, while diluted EPS climbed 29% to $2.71. Growth was led by the cloud and the LinkedIn acquisition (completed December 2016 for $27.0 billion). Commercial cloud annualized revenue run rate exceeded $18.9 billion, Azure revenue grew 99%, and Office 365 commercial revenue grew 46%. Results were also flattered by a sharp reduction in phone-business charges compared with prior years, and the effective tax rate fell to 8% from 15%, partly due to realized tax benefits from earlier phone losses. Reported results are depressed by a $6.7 billion net deferral of Windows 10 revenue, which the company expects to reverse under the new revenue standard adopted July 1, 2017. Balance sheet and cash flow highlights include $133.0 billion in cash and short-term investments, but also total long-term debt of $77.8 billion principal (up from $40.9 billion) after debt issuances used partly to fund acquisitions. Operating cash flow reached $39.5 billion, and free cash flow (operating cash flow less capex of $8.1 billion) was roughly $31.4 billion. Shareholder returns included $11.8 billion in dividends paid and $10.3 billion in share repurchases, with $36.8 billion remaining under the current authorization. Management also disclosed that $127.9 billion of cash is held by foreign subsidiaries, a repatriation-related issue for investors to watch. Key risks flagged in the filing include intense competition across platforms and business models, the margin pressure from investing in cloud infrastructure, regulatory scrutiny (including EU competition matters, the GDPR taking effect May 2018, and an ongoing FCPA-related inquiry), an unresolved IRS transfer-pricing audit, and the planned reorganization of the global sales force announced in July 2017, which could disrupt revenue in the near term.
Aug 2, 2017
2016
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2016
Microsoft's 2016 10-K filing reveals a company in transition, heavily focused on its "mobile-first, cloud-first" strategy under CEO Satya Nadella. While overall revenue saw a slight decrease primarily due to the impact of Windows 10 revenue deferrals and foreign currency headwinds, the Intelligent Cloud segment demonstrated robust growth, with Azure revenue more than doubling. The company continued its shift from traditional software licensing to cloud-based services, as evidenced by the significant growth in Office 365 subscriptions and Dynamics CRM Online. However, the report also highlights significant challenges and restructuring efforts within the phone business, leading to substantial impairment and restructuring charges. Key strategic initiatives for the fiscal year included reinforcing productivity and business processes, building the intelligent cloud platform, and creating a more personal computing experience. The company's investment in research and development remained substantial, underscoring its commitment to innovation across these strategic pillars. While facing intense competition, Microsoft's diversified product portfolio, global reach, and ongoing cloud transformation position it for continued evolution in the technology landscape.
Jul 28, 2016
2015
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2015
Microsoft's 2015 10-K filing highlights a pivotal year of transformation driven by a "mobile-first, cloud-first" strategy. The company focused on reinventing productivity, building an intelligent cloud platform, and creating more personal computing experiences. Revenue grew 8% year-over-year, reaching $93.6 billion, largely due to strong performance in Commercial Cloud, Surface devices, and server products. However, operating income saw a significant 35% decline to $18.2 billion, primarily impacted by $10 billion in impairment, integration, and restructuring charges, notably a $7.5 billion goodwill and asset impairment charge related to the Phone Hardware business. Despite the operational challenges and significant charges impacting profitability, Microsoft's strategic shift towards cloud services like Office 365 Commercial and Azure showed strong momentum, with Office 365 Commercial seats increasing by 74% and Azure experiencing triple-digit growth in its Q4. The company also emphasized its commitment to innovation through substantial R&D investments, which remained consistent at 13% of revenue. Key developments included the impending launch of Windows 10 and the acquisition of Mojang, the developer of Minecraft, underscoring a continued focus on expanding its ecosystem and diversifying its product portfolio.
Jul 31, 2015
2014
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2014
Microsoft's fiscal year 2014 report highlights a significant year of transformation, marked by the strategic acquisition of Nokia's Devices and Services business, which bolstered its mobile presence. The company reported a robust revenue increase of 12% to $86.8 billion, driven by strong performance in its Commercial segments, particularly server products and cloud offerings, as well as growth in the Devices and Consumer segment, notably from Xbox and Surface. Despite increased costs associated with cloud infrastructure and the Nokia acquisition, operating income saw a modest 4% increase to $27.8 billion. Microsoft is actively pivoting towards a "mobile-first, cloud-first" strategy, emphasizing continued investment in cloud services like Azure and Office 365, and in developing its devices ecosystem. The company is navigating an intensely competitive landscape, with ongoing investments in research and development aimed at driving future growth in productivity, platforms, and cloud computing. Investors should monitor the integration of Nokia and the company's progress in expanding its cloud and device offerings as key drivers of future performance.
Jul 31, 2014
2013
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2013
Microsoft Corporation's 2013 10-K filing reveals a company navigating significant technological shifts and investing heavily in its "devices and services" strategy. The company reported solid revenue growth, driven by its Server and Tools segment and newer offerings like Windows 8, Surface, and Office 365. However, the Windows Division faced headwinds from a declining PC market, impacting OEM revenue. Key financial highlights include robust operating income growth, largely due to a significant goodwill impairment charge in the prior year that did not recur. The company maintained a strong cash position, with substantial cash held by foreign subsidiaries. Microsoft continued its commitment to returning value to shareholders through dividends and share repurchases. The report also underscores the company's ongoing investment in research and development, highlighting a strategic pivot towards cloud computing and an integrated family of devices and services, despite the inherent risks and uncertainties associated with these transformative initiatives.
Jul 30, 2013
2012
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2012
Microsoft Corporation's 2012 10-K filing reveals a company with diversified revenue streams, though facing challenges in its Windows division. Revenue grew to $73.7 billion, driven by strong performance in Server and Tools and the Microsoft Business Division (driven by Office). However, the Windows division saw a revenue decline, partly due to the PC market's slower growth and a revenue deferral related to the Windows Upgrade Offer. The company also experienced a significant operating loss in its Online Services Division due to a $6.2 billion goodwill impairment charge, primarily related to the aQuantive acquisition, impacting overall profitability for the year. Microsoft continues to invest heavily in R&D, particularly in cloud computing and smart connected devices, signaling its strategic focus on future growth areas.
Jul 26, 2012
2011
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2011
Microsoft Corporation's fiscal year 2011 10-K filing highlights a year of continued revenue growth, driven significantly by the Entertainment and Devices Division, particularly the Xbox 360 platform and the new Kinect sensor. The Microsoft Business Division also showed robust performance with strong sales of the Office 2010 system. While the Windows Division experienced a slight revenue dip, this was largely attributed to shifts in the PC market, including a decline in consumer PC sales and a higher proportion of sales in emerging markets with lower average selling prices. The company is making substantial investments in cloud computing, recognizing it as a key area for future growth, as evidenced by the development of offerings like Windows Azure and Office 365. Financially, Microsoft demonstrated strong operational cash flow and a significant increase in cash and investments. The company continued its commitment to returning value to shareholders through share repurchases and dividends. The filing also details the strategic alliance with Nokia for Windows Phone, indicating a push into the mobile market. The company is actively managing various risks, including intense competition, intellectual property protection, and the evolving cloud computing landscape, while also navigating ongoing legal and regulatory scrutiny.
Jul 28, 2011
2010
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2010
Microsoft Corporation's 2010 10-K filing highlights a year of significant revenue growth, primarily driven by the successful launch of Windows 7 and a recovering PC market. The company's strategic focus on "software plus services" and cloud computing is evident across its business segments, including the development of Azure and Office Web Apps. Despite facing intense competition and ongoing regulatory scrutiny, Microsoft demonstrated strong financial performance, with increased operating income and diluted earnings per share compared to the previous year. The company continues to invest heavily in research and development, emphasizing innovation in areas like cloud computing, natural user interfaces, and intelligent computing. While the Entertainment and Devices Division saw steady revenue, the Online Services Division continued to operate at a loss, albeit with revenue growth, partially attributed to the new Yahoo! search agreement. Microsoft's robust cash position and ongoing share repurchase programs underscore its financial strength and commitment to shareholder returns.
Jul 30, 2010
2009
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2009
Microsoft Corporation's fiscal year 2009 (ending June 30, 2009) filing reveals a year of navigating economic headwinds, with total revenue slightly decreasing by 3% to $58.4 billion. This was primarily driven by a slowdown in PC shipments impacting the Client segment, and a decline in the Entertainment and Devices Division. Despite these revenue pressures, the company demonstrated resilience, with strong performance in its Server and Tools segment and steady results from the Microsoft Business Division. The company also managed its expenses effectively, with operating income declining by 9% and a focus on efficiency measures, including a resource management program impacting headcount. Microsoft continued its significant investment in research and development, particularly in cloud computing and natural user interfaces, indicating a strategic focus on future growth drivers. Financially, Microsoft maintained a strong liquidity position with $31.4 billion in cash, cash equivalents, and short-term investments. The company also continued its commitment to returning value to shareholders through share repurchases and dividends. While facing challenges from economic conditions and competition, including open-source models, Microsoft's diverse product portfolio and ongoing innovation efforts position it to adapt to evolving market demands.
Jul 30, 2009
2008
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2008
Microsoft Corporation's 2008 10-K filing reveals a company experiencing robust growth across its core segments, driven by strong product adoption and strategic acquisitions. Revenue saw a significant 18% increase year-over-year, reaching $60.4 billion, with net income growing to $17.7 billion. This financial performance was underpinned by strong sales in the Client segment (Windows Vista), the Server and Tools division, and the Microsoft Business Division (Office system), all demonstrating double-digit revenue growth. The Entertainment and Devices Division also showed substantial revenue increase, largely due to strong Xbox 360 sales. Significant investments in research and development, totaling $8.2 billion, underscore Microsoft's commitment to innovation, particularly in areas like 'software plus services' and consumer technology. The company also continued its aggressive share repurchase program, returning substantial capital to shareholders. While facing ongoing competition and regulatory scrutiny, particularly from the European Commission, Microsoft's financial health remains strong, supported by a substantial cash position and diversified revenue streams.
Jul 31, 2008
2007
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2007
Microsoft Corporation's 2007 10-K report highlights a strong year of growth, driven by the successful launch of Windows Vista and the 2007 Microsoft Office system. Revenue increased by 15% to $51.12 billion, with net income reaching $14.07 billion. The company's diversified business segments, including Client, Server and Tools, Microsoft Business Division, Online Services, and Entertainment and Devices, all contributed to this performance, though the Online Services Business and Entertainment and Devices Division continued to operate at a loss, indicating ongoing investment in these areas. Despite facing competitive pressures from open-source software and the evolving software-as-a-service model, Microsoft maintained its market leadership. The company's significant investment in research and development, amounting to $7.12 billion, underscores its commitment to innovation and future growth. Microsoft also continued its substantial share repurchase program, signaling confidence in its financial health and commitment to returning value to shareholders. The report details ongoing legal and regulatory challenges, particularly concerning antitrust matters in the U.S. and Europe, which represent potential risks to future operations.
Aug 3, 2007
2006
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2006
Microsoft Corporation's 2006 10-K filing highlights a year of substantial revenue growth and significant investment in future products. The company reported total revenue of $44.28 billion, an increase of 11% year-over-year, driven by strong performance in its Server and Tools, Client, and Information Worker segments, boosted by new product launches like SQL Server 2005 and Visual Studio 2005, as well as the initial rollout of the Xbox 360. Despite increased operating expenses, particularly in sales and marketing and cost of revenue related to Xbox 360 production, operating income grew by 13% to $16.47 billion. The company also demonstrated a strong commitment to returning capital to shareholders, completing a $30 billion share repurchase program and authorizing new significant repurchase programs. Looking ahead, Microsoft is focused on driving continued growth through its upcoming launches of Windows Vista and the 2007 Microsoft Office system. The company is strategically investing in adjacent businesses and new markets, including cloud services and online offerings, signaling a forward-looking approach to innovation and market expansion. While facing ongoing competition and regulatory scrutiny, Microsoft's robust financial position, substantial cash reserves, and clear product roadmap position it for continued leadership in the technology sector.
Aug 25, 2006
2005
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2005
Microsoft Corporation's 2005 10-K filing highlights a year of significant revenue growth, reaching $39.788 billion, an 8% increase from the previous year. This growth was primarily driven by strong performance in the Server and Tools, Client, and Information Worker segments, benefiting from increased PC and server hardware shipments and the positive impact of foreign currency exchange rates. Operating income saw a substantial surge of 61%, reaching $14.561 billion, largely due to decreased stock-based compensation expenses, increased revenue from higher-margin segments, and a reduction in legal costs associated with major litigation. The company continues to invest heavily in research and development, particularly for upcoming products like Windows Vista and Office 12, positioning itself for future innovation. Microsoft also returned significant capital to shareholders through a substantial $32.64 billion special dividend and continued its aggressive share repurchase program, underscoring a strong financial position and commitment to shareholder value.
Aug 26, 2005
2004
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2004
Microsoft Corporation's 2004 10-K filing reveals a company with strong revenue growth, driven primarily by its core Windows and Office products, alongside expanding server and online services. The company detailed its diverse business segments, including Client, Server and Tools, Information Worker, Microsoft Business Solutions, MSN, Mobile and Embedded Devices, and Home and Entertainment. Despite facing intense competition and legal challenges, Microsoft demonstrated resilience, with significant investments in research and development focused on future innovations like the Longhorn operating system and new device platforms. Financially, the company reported substantial cash reserves and robust operating cash flow, underscoring its financial strength. Key highlights include robust revenue growth, a significant increase in stock-based compensation expenses related to a stock option transfer program, and substantial charges from legal settlements. Microsoft also announced significant capital allocation plans, including a substantial special dividend and a multi-year share repurchase program, signaling confidence in its financial position and future prospects.
Sep 1, 2004
2003
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2003
Microsoft Corporation's 2003 10-K report showcases a company experiencing robust revenue growth, driven by strong performance in its Client, Server and Tools, and Information Worker segments. The company's strategic restructuring into seven product segments—Client, Server and Tools, Information Worker, Microsoft Business Solutions, MSN, Mobile and Embedded Devices, and Home and Entertainment—aims to enhance management oversight and resource allocation. Financially, Microsoft reported significant growth in net income and operating income, bolstered by substantial cash reserves and short-term investments. The company also initiated its first annual common stock dividend, signaling a maturing financial strategy. Despite facing intense competition and ongoing legal challenges, particularly antitrust litigation, Microsoft demonstrated resilience and continued investment in research and development, with a particular focus on its .NET architecture and Trustworthy Computing initiatives.
Sep 5, 2003
2002
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2002
Microsoft Corporation's 2002 10-K filing reveals a company experiencing robust revenue growth, reaching $28.365 billion for the fiscal year ending June 30, 2002. This growth was propelled by the successful launch of the Xbox gaming console and strong adoption of Windows XP operating systems. The company continues to diversify its offerings across various segments, including Desktop and Enterprise Software, Consumer Software and Devices, and a growing online presence through MSN. Despite facing intense competition and evolving market dynamics, Microsoft demonstrates a strong financial position with significant cash and short-term investments totaling $38.65 billion, indicating substantial financial flexibility for future investments and operations. The filing also highlights Microsoft's strategic focus on innovation, particularly its .NET architecture and the Trustworthy Computing initiative aimed at enhancing security and privacy. While the company navigates challenges such as the rise of open-source software and ongoing legal proceedings, its diversified product portfolio, strong brand recognition, and significant R&D investments position it for continued relevance and growth in the technology sector.
Sep 6, 2002
2001
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2001
Microsoft Corporation's 2001 10-K filing reveals a company navigating a period of significant strategic evolution and market shifts. While revenue growth showed a deceleration to 10% in fiscal year 2001 compared to prior years, the company continued to expand its top line, reaching $25.296 billion. This growth was primarily driven by the strong performance of its Windows 2000, SQL Server, and other .NET Enterprise Servers, alongside robust contributions from the Consumer Software, Services, and Devices segment. A notable aspect of this period was Microsoft's substantial investment in research and development, with R&D expenses reaching $4.38 billion, representing 17.3% of revenue. This underscores the company's commitment to innovation, particularly with its strategic initiative, Microsoft .NET, and emerging products like Xbox. However, the company also faced increased competition, particularly from shifts towards server-based and web-based applications, and the ongoing legal challenges related to antitrust concerns, which could impact future business practices and product development.
Sep 18, 2001
2000
MICROSOFT CORP Annual Report, Year Ended Jun 30, 2000
Microsoft's fiscal 2000 10-K (year ended June 30, 2000) shows a company still growing strongly but with clear signs of deceleration. Revenue rose 16% to $22.96 billion (from $19.75 billion), while net income climbed 21% to $9.42 billion and diluted EPS reached $1.70. Operating income was $10.94 billion, and the operating margin narrowed slightly as research and development ($3.78 billion, 16.4% of revenue) and sales and marketing costs grew faster than sales. Investment income of $3.18 billion, up from $1.80 billion, contributed materially to pre-tax income, so investors should note that a meaningful part of earnings came from the investment portfolio rather than core operations. Management flagged slow business PC demand, lower average revenue per license, and a shift toward licensing and subscriptions as headwinds, and warned that operating margins in fiscal 2001 may decline. Balance sheet strength is a major positive. Cash and short-term investments reached $23.80 billion, stockholders' equity rose to $41.37 billion, and the company reports no material long-term debt. Operating cash flow was $13.96 billion. However, the company also faces a large overhang from the U.S. government antitrust case. The June 7, 2000 judgment ordered a breakup into an operating systems business and an applications business. That judgment is stayed pending appeal, but management acknowledges that failing to obtain relief from certain provisions would likely have a material adverse effect. Additional class actions, EU proceedings, and a non-public SEC inquiry into accounting reserve practices add to the legal risk profile. For investors, the filing describes a company with dominant franchises in Windows and Office, a rapidly growing server business, and a large but still loss-making consumer and online segment. Its .NET strategy is expected to increase R&D without corresponding near-term revenue growth. Taken together, the report points to a financially robust company whose near-term earnings quality and long-term structure both depend on the outcome of the antitrust appeal and its ability to convert new initiatives into revenue.
Sep 28, 2000
1999
MICROSOFT CORP Annual Report, Year Ended Jun 30, 1999
Microsoft's fiscal 1999 10-K (year ended June 30, 1999) shows a company at the height of its Windows and Office franchise, with revenue up 29% to $19.75 billion and net income up 73% to $7.79 billion, or $1.42 per diluted share. Operating income rose to $9.93 billion, and the operating margin held at roughly 50%, aided by lower cost of revenue (14.3% of revenue, down from 16.1%) and a rise in OEM and organizational licensing relative to retail packaged products. Revenue growth was driven mainly by Windows platforms ($8.59 billion) and productivity applications and developer products ($8.69 billion), with Consumer, Commerce, and Other still operating at a loss of about $1.07 billion. Investors should note that much of the reported earnings strength came from investment income of $1.80 billion, which was nearly 2.5 times the prior year's figure. This was driven by a $5.0 billion AT&T convertible preferred investment and sizable stakes in Comcast, MCI WorldCom, Nextel, NTL, and others. Equity and other investments grew to $14.37 billion, and unrealized gains of $3.15 billion sit on the balance sheet. The company ended the year with $17.24 billion in cash and short-term investments, no material long-term debt, and stockholders' equity of $28.44 billion, and it has never paid cash dividends. Operating cash flow reached $10.03 billion. The filing also flags material risks. The DOJ and 20 state Attorneys General antitrust case, which challenges the bundling of Internet Explorer with Windows, went to trial in October 1998, and the Sun Microsystems Java litigation and the Caldera DOS/Windows suit remain pending. Management also disclosed that the company expects operating margins in fiscal 2000 may decline, citing higher operating expenses, the shift toward ratable revenue recognition, and the fact that cost of revenue gains are unlikely to continue. Management nonetheless described its outlook as optimistic.
Sep 28, 1999
1998
MICROSOFT CORP Annual Report, Year Ended Jun 30, 1998
Microsoft's fiscal 1998 10-K (year ended June 30, 1998) shows a company still growing rapidly but beginning to show signs of deceleration. Revenue rose 27% to $14.48 billion, net income grew 30% to $4.49 billion, and diluted EPS reached $1.67 (split-adjusted). Revenue growth slowed from 46% in fiscal 1996 and 31% in fiscal 1997, and management explicitly warned that growth in 1999 may not approach prior-year levels and that operating margins may decline as operating expenses rise. Operating income was $6.41 billion, and the operating margin held at roughly 44%, supported by cost of revenue falling to 8.3% of revenue. The balance sheet remains exceptionally strong. Cash and short-term investments reached $13.93 billion, stockholders' equity was $16.63 billion, and the company carries no material long-term debt. Operating cash flow was $6.88 billion, up from $4.69 billion. A growing share of revenue is recognized ratably, which lifted unearned revenue to $2.89 billion and provides better visibility into future earnings. Management continued aggressive share repurchases to offset employee option dilution, and it has not paid common cash dividends. The principal risks are legal and competitive. The U.S. Department of Justice and 20 state Attorneys General filed a sweeping Sherman Act antitrust case in May 1998 centered on the bundling of Internet Explorer with Windows, and the Sun Microsystems Java litigation and Caldera lawsuit are also pending. Management believes these matters will not have a material adverse effect on financial position, but the outcome could affect product design and distribution practices. Competition from Linux, Netscape, and thin-client architectures is also cited as a longer-term threat to the Windows and Office franchise.
Sep 25, 1998
1997
MICROSOFT CORP Annual Report, Year Ended Jun 30, 1997
Microsoft's fiscal 1997 10-K (year ended June 30, 1997) shows a company still growing rapidly and highly profitable. Revenue rose 31% to $11.36 billion, operating income reached $5.13 billion, and net income climbed 57% to $3.45 billion, or $2.63 per diluted share (restated for the December 1996 two-for-one split). Gross margins widened as cost of revenue fell to 9.6% of revenue, and the return on revenue reached 30.4%. Growth was driven by the Windows 95 cycle, Office 97, and a shift toward OEM and corporate licensing, though management cautioned that 1998 revenue growth may not match the pace of 1997, particularly in the second half, and that operating margins could decline as expenses rise. The balance sheet is conservative. Cash and short-term investments totaled $8.97 billion, the company carries no material long-term debt, and stockholders' equity rose to $10.78 billion. Cash from operations was $4.69 billion. Capital allocation included $3.1 billion in share repurchases, a $1.0 billion investment in Comcast ($500 million common and $500 million convertible preferred), a $980 million 2.75% convertible preferred issuance used to fund buybacks, and the August 1997 acquisition of WebTV for $425 million, which will produce a roughly $300 million in-process R&D charge in fiscal 1998. Microsoft does not pay cash dividends. Key risks flagged in the filing include intense competition from larger rivals, the pace of technological change (especially Internet and Java-based thin-client strategies), software piracy outside the U.S., foreign exchange exposure (about a third of revenue is collected in foreign currencies), and an ongoing U.S. Department of Justice antitrust investigation, which management does not expect to have a material adverse effect. R&D spending reached $1.93 billion, about 17% of revenue, and management expects it to increase in 1998.
Sep 29, 1997
1996
MICROSOFT CORP Annual Report, Year Ended Jun 30, 1996
Microsoft's fiscal 1996 10-K (year ended June 30, 1996) shows a company at the height of the Windows 95 cycle. Net revenues rose 46% to $8.67 billion from $5.94 billion, and net income grew 51% to $2.2 billion, or $3.43 per share. Operating income reached $3.08 billion, and the operating margin held at about 35%. Growth was driven by Windows 95 upgrades, Office suite sales, and a rapid expansion of OEM licensing, where OEM channel revenue rose to $2.50 billion. Management, however, cautioned that the revenue growth rate in the first half of fiscal 1997 may not approach 1996's level, and that operating expenses are expected to rise, which could pressure margins. The balance sheet is strong. Cash and short-term investments reached $6.94 billion, the company carries no material long-term debt, and stockholders' equity rose to $6.9 billion. Operating cash flow was $3.72 billion. Microsoft also repurchased $1.26 billion of its own stock during the year. Research and development spending increased 67% to $1.43 billion, or 16.5% of revenue, reflecting continued heavy investment in Windows NT, the Internet, and online services. Investors should weigh several risks. Revenue recognition is shifting toward ratable recognition for Windows products because Internet browser updates are bundled into operating system licenses, which defers a portion of revenue. The company is also under a U.S. Department of Justice antitrust inquiry concerning Web browsers, which management does not expect to be materially adverse. Its newer ventures, including The Microsoft Network, the MSNBC joint ventures, and DreamWorks Interactive, carry expenses but have not yet been material to results. Competition is intensifying in the Internet, browser, and online services markets, notably from Netscape, and the company's effective tax rate rose to 35.0%.
Sep 27, 1996
1995
MICROSOFT CORP Annual Report, Year Ended Jun 30, 1995
Microsoft's fiscal 1995 10-K (year ended June 30, 1995) shows a company at the height of its PC software dominance. Net revenues rose 28% to $5.94 billion from $4.65 billion, operating income reached $2.04 billion, and net income climbed 27% to $1.45 billion, or $2.32 per share. Operating margin held near 34%, and return on net revenues stayed around 24.5%. Growth was driven mainly by higher software license volume, with OEM channel revenue up to $1.65 billion, U.S. and Canada revenue at $1.88 billion, and Other International revenue jumping 74% to $924 million. The Applications and Content group ($3.58 billion) outgrew the Platforms group ($2.36 billion), led by Microsoft Office. The balance sheet is conservative. Cash and short-term investments totaled $4.75 billion against no material long-term debt, and stockholders' equity reached $5.33 billion. Operating cash flow was $1.99 billion. Capital spending rose to $495 million, with about $150 million committed to new buildings. Management has not paid cash dividends and instead repurchased $649 million of stock during the year. The company also sold put warrants with a maximum repurchase obligation of $405 million, which is now classified outside equity. The filing looks forward to Windows 95, released August 24, 1995, and the launch of The Microsoft Network. Management warns that operating expenses will rise in 1996 and that growth rates could slow in 1997 after an upgrade-driven surge. Risks flagged include rapid technological change, competition from UNIX vendors, Novell, Lotus, and the Internet, pricing pressure, foreign exchange exposure, software piracy, and a DOJ review of MSN's inclusion in Windows 95. Management says that review is not expected to have a material adverse effect.
Sep 25, 1995
1994
MICROSOFT CORP Annual Report, Year Ended Jun 30, 1994
Microsoft's fiscal 1994 10-K (year ended June 30, 1994) shows a company at peak growth momentum. Net revenues rose 24% to $4.65 billion and net income grew 20% to $1.15 billion, with EPS of $1.88 (split-adjusted). This marked the 19th consecutive year of revenue and earnings growth, driven mainly by Windows and Microsoft Office. Operating income reached $1.73 billion, and the operating margin held at roughly 37%, supported by a gross margin of about 84% as cost of revenues fell to 16.4% of revenue. Growth in applications revenue ($2.93 billion, up 30%) and OEM licensing ($1.18 billion, up 61%) were the main drivers, while systems revenue grew to $1.52 billion. The balance sheet is very strong. Cash and short-term investments totaled $3.61 billion, about 67% of total assets of $5.36 billion, and the company reports no material long-term debt. Stockholders' equity rose to $4.45 billion, and operating cash flow was $1.59 billion. The company has not paid cash dividends, and it repurchases shares to fund employee stock option and purchase plans. Investors should weigh several risks. The 1994 results include a net $90 million pretax litigation charge tied to the Stac Electronics patent case, and R&D spending rose to 13.1% of revenue. Management explicitly stated that recent revenue growth rates are not sustainable and warned that operating expenses may rise in 1995. Pending legal matters include the Apple Computer and Wang Laboratories suits, and the company settled antitrust matters with the European Commission and the DOJ through consent decrees. Management also flagged a proposed stock-option expensing standard that could materially reduce future reported earnings.
Sep 27, 1994