10-QPeriod: Q3 FY2018

MICROSOFT CORP Quarterly Report for Q3 Ended Mar 31, 2018

Filed April 26, 2018For Securities:MSFT

Summary

Microsoft Corporation's (MSFT) 10-Q filing for the quarter ended March 30, 2018, reveals a company demonstrating robust performance, particularly driven by its cloud computing segment, Azure, and continued strength in its Productivity and Business Processes division. Investors should note the significant year-over-year growth in revenue and net income, underscoring the company's successful strategic shift towards subscription-based services and its ongoing dominance in enterprise software. The company's financial health remains strong, with substantial cash reserves and a focus on returning value to shareholders through share repurchases and dividends. The report indicates positive momentum across key business areas, with cloud services continuing to be a primary growth engine. While the company faces ongoing competitive pressures and evolving market dynamics, the results presented suggest effective execution of its strategy to adapt and thrive in the technology landscape. Investors can look to the sustained growth in recurring revenue streams as a key indicator of future stability and profitability.

Financial Highlights

53 data points
Beta

Revenue

$26.82B

65.4% Gross Margin

Net Income

$7.42B

27.7% Net Margin

EPS (Diluted)

$0.95

Total Assets

$245.50B

Cash & Equivalents

$9.22B

Free Cash Flow

$9.22B

Financial Statements
Beta
Revenue$26.82B
Cost of Revenue$9.27B
Gross Profit$17.55B
R&D Expenses$3.71B
Operating Income$8.29B
Interest Expense$691.00M
Net Income$7.42B
EPS (Basic)$0.96
EPS (Diluted)$0.95
Shares Outstanding (Basic)7.70B
Shares Outstanding (Diluted)7.79B

Key Highlights

  • 1Strong revenue and net income growth compared to the prior year period.
  • 2Significant contributions from the Productivity and Business Processes segment, likely driven by Office 365 and LinkedIn.
  • 3Continued expansion and adoption of Microsoft Azure, signaling a successful cloud strategy.
  • 4Healthy cash flow generation, supporting ongoing investments and shareholder returns.
  • 5Repurchase of common stock and payment of dividends demonstrate a commitment to shareholder value.
  • 6Ongoing diversification of revenue streams, reducing reliance on traditional software sales.

Frequently Asked Questions

Revenue growth was primarily driven by strong performance in the Productivity and Business Processes segment, which includes Office 365 Commercial and LinkedIn, and significant expansion in Microsoft's Intelligent Cloud segment, with Azure continuing to see substantial growth.

Microsoft's cloud business, particularly Azure, continues to be a major growth engine for the company. The filing indicates substantial growth in this segment, reflecting increasing adoption of cloud services by businesses.

Microsoft continues to return value to shareholders through its share repurchase program and the payment of quarterly dividends. These actions are supported by the company's strong cash flow generation.

The filing indicates that Part II includes sections on Legal Proceedings and Risk Factors. Investors should review these sections for a comprehensive understanding of potential challenges and uncertainties facing the company.