01—Abstract
Summary
Summary of the 10-K filed July 28, 2022. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb 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.
02—Key points
Key Highlights
- Total revenue grew 18% year-over-year to $198.3 billion.
- Microsoft Cloud revenue increased significantly by 32% to $91.2 billion.
- Intelligent Cloud segment revenue rose 25%, driven by Azure and other cloud services growth of 45%.
- Productivity and Business Processes segment revenue grew 18%, with strong performance from Office 365 Commercial and LinkedIn.
- More Personal Computing segment revenue increased 10%, supported by Windows and Search and news advertising.
- The company completed the acquisition of Nuance Communications for $18.8 billion and announced plans to acquire Activision Blizzard for $68.7 billion.
- Returned $12.4 billion to shareholders in Q4 FY22 through share repurchases and dividends, and $28 billion in FY22 through share repurchases alone.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Microsoft Corp kept $0.37.
- Revenue$198.27B100.0%
- Cost of revenue−$62.65B31.6%
- Gross profit$135.62B68.4%
- Operating costs−$52.24B26.3%
- Operating income$83.38B42.1%
- Interest, other & tax−$10.64B5.4%
- Net income$72.74B36.7%
Where FY2022 revenue went
$198.27B- Net income: $72.74B, 37% of revenue
- Cost of revenue: $62.65B, 32% of revenue
- Other operating costs: $27.73B, 14% of revenue
- R&D: $24.51B, 12% of revenue
- Interest, other & tax: $10.64B, 5.4% of revenue
Kept 37% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed July 28, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $198.27B$168.09B | +18.0% |
| Cost of Revenue | $62.65B$52.23B | +19.9% |
| Gross Profit | $135.62B$115.86B | +17.1% |
| R&D Expenses | $24.51B$20.72B | +18.3% |
| Operating Income | $83.38B$69.92B | +19.3% |
| Interest Expense | $2.06B$2.35B | −12.1% |
| Net Income | $72.74B$61.27B | +18.7% |
| EPS (Basic) | $9.70$8.12 | +19.5% |
| EPS (Diluted) | $9.65$8.05 | +19.9% |
| Shares Outstanding (Basic) | 7.50B7.55B | −0.7% |
| Shares Outstanding (Diluted) | 7.54B7.61B | −0.9% |
05—Questions
Frequently Asked Questions
What was Microsoft's revenue growth in fiscal year 2022?
Microsoft reported a total revenue of $198.3 billion for fiscal year 2022, an 18% increase compared to the previous year. The key driver of this growth was the Microsoft Cloud, which saw a 32% increase in revenue, reaching $91.2 billion.
What were the main growth drivers for Microsoft's segments?
The 'Productivity and Business Processes' segment grew 18%, driven by Office 365 Commercial and LinkedIn. The 'Intelligent Cloud' segment expanded by 25%, largely due to a 45% increase in Azure and other cloud services. The 'More Personal Computing' segment saw a 10% increase, supported by Windows and Search and news advertising.
What significant acquisitions did Microsoft complete or announce in FY22?
In fiscal year 2022, Microsoft completed the acquisition of Nuance Communications, Inc. for $18.8 billion in March 2022, enhancing its AI and industry-specific cloud capabilities. Additionally, in January 2022, Microsoft announced its definitive agreement to acquire Activision Blizzard, Inc. for $68.7 billion, a move aimed at significantly expanding its gaming business.
How did Microsoft return capital to shareholders in FY22?
Microsoft returned capital to shareholders through both dividends and share repurchases. In the fourth quarter of fiscal year 2022 alone, the company returned $12.4 billion to shareholders through these means. Over the full fiscal year 2022, share repurchases amounted to $28 billion.
06—Continue