10-QPeriod: Q3 FY2022

MICROSOFT CORP Quarterly Report for Q3 Ended Mar 31, 2022

Filed April 26, 2022For Securities:MSFT

Summary

Microsoft Corporation reported strong financial results for the third quarter and first nine months of fiscal year 2022, driven by continued growth across its key segments. Total revenue for the third quarter increased 18% year-over-year to $49.4 billion, with net income rising 8% to $16.7 billion. Diluted earnings per share also saw a healthy increase. The company highlighted significant growth in its Intelligent Cloud segment, particularly from Azure and other cloud services, and sustained strength in its Productivity and Business Processes segment driven by Office 365 Commercial and LinkedIn. Despite some headwinds in the More Personal Computing segment, overall performance demonstrates robust demand for Microsoft's cloud offerings and diversified product portfolio.

Financial Highlights

53 data points
Beta

Revenue

$49.36B

68.4% Gross Margin

Net Income

$16.73B

33.9% Net Margin

EPS (Diluted)

$2.22

Total Assets

$344.61B

Cash & Equivalents

$12.50B

Free Cash Flow

$20.05B

Financial Statements
Beta
Revenue$49.36B
Cost of Revenue$15.62B
Gross Profit$33.74B
R&D Expenses$6.31B
Operating Income$20.36B
Interest Expense$503.00M
Net Income$16.73B
EPS (Basic)$2.23
EPS (Diluted)$2.22
Shares Outstanding (Basic)7.49B
Shares Outstanding (Diluted)7.53B

Key Highlights

  • 1Total revenue for Q3 FY22 grew 18% to $49.4 billion, compared to $41.7 billion in Q3 FY21.
  • 2Net income for Q3 FY22 increased 8% to $16.7 billion, resulting in diluted EPS of $2.22, up from $2.03 in the prior year.
  • 3Intelligent Cloud segment revenue surged 26% to $19.1 billion, with Azure and other cloud services growing by 46%.
  • 4Productivity and Business Processes segment revenue increased 17% to $15.8 billion, fueled by Office Commercial products and cloud services (up 12%) and LinkedIn (up 34%).
  • 5More Personal Computing segment revenue rose 11% to $14.5 billion, driven by Windows and Search and news advertising growth.
  • 6The company completed the acquisition of Nuance Communications for $18.8 billion in March 2022, integrating its AI capabilities into the Intelligent Cloud segment.
  • 7Microsoft Cloud revenue increased 32% to $23.4 billion for the quarter.

Frequently Asked Questions

Microsoft reported an 18% increase in total revenue for the third quarter of fiscal year 2022, reaching $49.4 billion, up from $41.7 billion in the same quarter of the prior year. This growth was driven by strong performance across all business segments.

The company's Microsoft Cloud revenue experienced significant growth, increasing 32% to $23.4 billion in the third quarter of fiscal year 2022. This segment includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, and Dynamics 365.

The Intelligent Cloud segment revenue grew 26% to $19.1 billion. This strong performance was primarily driven by a 46% increase in Azure and other cloud services revenue, alongside contributions from server products and enterprise services. The acquisition of Nuance Communications also contributed to this segment's results starting in March 2022.

Microsoft maintained a strong liquidity position, with cash, cash equivalents, and short-term investments totaling $104.7 billion as of March 31, 2022. Operating activities generated $64.4 billion in cash for the nine months ended March 31, 2022. The company also repurchased shares and paid dividends, returning significant capital to shareholders.