Summary
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.
Financial Highlights
55 data points| Revenue | $86.83B |
| Cost of Revenue | $27.08B |
| Gross Profit | $59.76B |
| R&D Expenses | $11.38B |
| Operating Expenses | $32.00B |
| Operating Income | $27.76B |
| Interest Expense | $597.00M |
| Net Income | $22.07B |
| EPS (Basic) | $2.66 |
| EPS (Diluted) | $2.63 |
| Shares Outstanding (Basic) | 8.30B |
| Shares Outstanding (Diluted) | 8.40B |
Key Highlights
- 1Revenue grew 12% to $86.8 billion in FY14, driven by strong commercial performance and the Nokia acquisition.
- 2Operating income increased by 4% to $27.8 billion, despite increased investments in cloud infrastructure and R&D.
- 3Completed the acquisition of Nokia's Devices and Services business for $9.5 billion to accelerate its mobile strategy.
- 4Commercial Cloud revenue doubled, indicating strong adoption of Office 365 Commercial and Microsoft Azure.
- 5Research and Development expenses increased by 9% to $11.4 billion, reflecting continued investment in new products and services.
- 6The company repurchased $6.4 billion of its common stock in FY14 and declared $4.6 billion in dividends, demonstrating a commitment to returning capital to shareholders.