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Microsoft (MSFT) stands out from other tech titans for its 40 years of delight and resilience in the face of failure. In fact, no other tech giant has received as many complaints about failed products as Microsoft. Its Kin, Kinect, Windows Phone and Zune, all of which became fiascos, are cited as evidence of Microsoft’s weakness and relative inferiority to Apple. And yet, for all its flawed products, Microsoft is America’s second-largest company by market capitalization and has had a massive impact. in the world. Comparing its impact on people’s lives to that of Apple (AAPL), Business Insider analysts say Microsoft wins hands down.
Microsoft’s greatest impressive achievement is making computing accessible. Forty years ago, Microsoft’s founders, Bill Gates and Paul Allen, set themselves the ambitious goal of putting a computer on every desk and in every home. Much of this has been achieved: more than a billion computers are currently used in homes and businesses around the world.
Even in its lean years, Microsoft managed to deliver impressive earnings results. Take 2013, for example, when Steve Ballmer retired as chief executive. Even in those gloomy times, Microsoft earned a profit of $27 billion. Now, the company fares much better. Microsoft’s earnings results for the third and fourth quarters of 2022 were solid. In Q3, Microsoft’s revenue increased 18% year over year to $49.4 billion. For Q4, the company reported revenue of $51.9 billion, up 12%, and a net income of $16.7 billion.
Continue reading to stay informed about Microsoft’s earnings in other years and see other statistics that show why Microsoft is one of the most valuable corporations in the world.
Microsoft ?? Earnings
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Source: Estadista
The story of Bill Gates’ wealth since 2013
Like the fortune of its founder Bill Gates, Microsoft’s profits have grown over the years, even as some of its inventions have fallen short of expectations. One of the most significant years of this decade was the first year of the pandemic: the company reported a whopping $143. 015 million in annual profit globally. The impressive expansion of 13. 65% was made possible by the flourishing of all segments of the company.
In 2021, fortune smiled even more brightly on Microsoft. The company’s annual profit amounted to 168,088 million dollars and an increase of 17. 53% compared to 2020. The quarter ended June 30, 2022 saw the slowest growth for the company, at 12% year-over-year. year – since 2020. Revenues 51,865 million dollars. Microsoft’s percentage-consistent earnings missed consensus for the first time since 2016, with net source of earnings rising 2% to $16. 74 billion. And yet, Microsoft’s earnings for the twelve months ended June 30, 2022, were positive, clocking in at 17. 96% year-on-year. The year 2022 has proven to be the company’s ultimate success in terms of annual profits.
In the first quarter of fiscal 2023, the company’s profits were $52. 12 billion. Microsoft beat analysts’ forecasts by 11%, or $49. 61 billion, in the first quarter of 2023. However, in the second quarter, the company was unable to present such a delicious wonder to analysts, lacking its estimates. Microsoft reported profits of $52. 75 billion, while Wall Street expected $52. 94 billion in the second quarter of 2023. Microsoft’s earnings per percentage were $2. 32 versus $2. 29 expected. Year-over-year, the company’s overall profit rose 2% in the fiscal second quarter. Analysts shook their heads at such low growth, the slowest since 2016.
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Although Microsoft experienced a slowdown in the last quarter of its fiscal year, 2022 was overall a success for the company. Microsoft increased its profits and returned huge sums of money to investors. The company also invested in its data center infrastructure and completed the acquisition of Nuance Communications, a leader in conversational artificial intelligence and ambient intelligence in healthcare, financial services, retail and telecommunications. Despite the recent 10,000 layoffs, Microsoft hired about 22% more people (221,000) in 2022 compared to 2021, when it had a workforce of 181,000.
Microsoft made a net profit of $72. 7 billion in 2022. It generated $89 billion in operating cash flow, up 16%, and higher bills to investors by 16%, to $50. 8 billion. The company’s operating margin stood at 42%, while its balance sheet soared. 9% to 365 billion dollars.
Microsoft’s profit in 2022 was $198. 27 billion, or $30. 2 billion, up 18% from 2021 profit. The main sources of this profit were Office products and services, which made up 23% of profit total, and Azure and other cloud services, which represented 22%. of 2022 profit. Windows contributed 12% of its annual profits to Microsoft, as did server products.
The biggest earner, Office, generated $44. 9 billion in 2022, up $5 billion, or 13%, from the profit it generated last year. Most of Office’s profits come from Office 365 subscriptions that combine online and offline productivity tools. Contributing to Microsoft’s overall earnings, Office is expected to give way to Azure in 2023, which is unexpected given Azure’s immediate growth.
In 2022, Azure contributed $44 billion to Microsoft, expanding its contribution to $13. 5 billion, or 45% from last year. The third-largest source of profit in 2022 is Windows. Microsoft generated $24. 8 billion in profits thanks to its help, and in doing so, its Windows profits rose to $1. 5 billion, or 7%, compared to 2021.
Buoyed by its good fortune in fiscal 2022, Microsoft is positive for the year ahead. The company’s acquisition of Xandr and its collaboration with Netflix may just be its advertising business. Its partnership with OpenAI and the planned integration of ChatGPT into Bing may simply put Microsoft over the top. search engine on par with Google. By driving other people away from Google through its more technologically complex search engine, Microsoft could pocket more money in the future. If all of its plans come true, Microsoft could be looking at double-digit expansion in cash and operating profit in consistent currency and US dollars in 2023.
Microsoft International Annual (Millions of U. S. Dollars)
Microsoft Q4 2024 Results
Microsoft reported its fourth quarter 2024 earnings on Tuesday, July 30, with EPS of $2. 95, $0. 01 higher than analysts’ estimate of $2. 94. Revenue for the quarter of $64. 7 billion, versus the consensus estimate of $64. 38 billion.
“While it posted another very positive quarter, whether in terms of earnings or profits, Microsoft’s low earnings point raises considerations for the coming quarters,” said Thomas Monteiro, senior analyst at Investing. com. “Weaker-than-expected cloud benefits expansion figures imply Azure would likely have limited expansion prospects in the near term if it is not on track to peak in 2024. Even though Microsoft offers the most productive product and unmatched earnings diversification, it still can’t grow fast enough to raise the capital needed to grow across all segments (adding AI) without a significant boost from Azure.
“This is even more vital when you consider the strain on the company’s margins, which has led it to halt the expansion of its workforce and invest only in high-level talent,” he continued. “Given that Apple has now joined the AI race and Alphabet’s significant steps are taken towards a diverse AI offering similar to Microsoft’s, the company’s undisputed leadership in the segment so far could be waning. In this context, having the margins and earnings expansion to deploy ever-increasing amounts of capital across all segments of the business will most likely be the differentiator for big tech in the second part of the year. The existing report casts significant doubt on whether the company is in the right position to remain a leader in this field.
Microsoft’s profits are generated through three segments: intelligent cloud, more private computing, and productivity and business processes. In 2022, Microsoft generated $63. 4 billion from its Productivity and Business Processes segment. It also earned more than $75. 3 billion from its Intelligent Cloud segment. This last segment is represented through Microsoft’s cloud platform, Azure.
Originally conceived as Windows Azure in the early 2010s, Microsoft Azure has long been the company’s answer to the advancement of cloud computing platforms from Google, AWS, and Google. Azure offers critical cloud hosting facilities, such as virtual appliances, and complex cloud installations, such as the Kubernetes engine. AI-based deployment, device learning, and bot installations. Azure is attractive to others because of the AI platform, blockchain products, and collaboration with SAP.
In 2021, Microsoft’s intelligent cloud revenue rose to $11. 7 billion, or 24%, compared to 2020. Revenue from Microsoft’s server and cloud products rose to $11. 2 billion, or 27%, driven by expansion into Azure. Azure earnings grew 50% driven through expansion in Microsoft’s consumption-based suite. In 2022, Microsoft’s intelligent cloud industry reached a vital milestone. In the first quarter of 2022, Microsoft’s intelligent cloud generated profits of $17. 06 billion. In the second quarter, the sector contributed 18,330 million dollars to the company. In the third quarter of 2022, profit increased by 32% to $23. 4 billion.
Microsoft continued to celebrate the increase in profits also in the fourth quarter of 2022, when the Intelligent Cloud department earned $20. 91 billion, representing a year-on-year increase of 28%. The overall profit in this sector is five times the target set by the current CEO of Microsoft in 2015. Commenting on the performance of the sector in the fourth quarter, Satya Nadella said: “We are seeing larger long-term commitments and a record of $100 on transactions of over a million and over a billion dollars this quarter.
In the fiscal first quarter of 2023, revenue from Microsoft’s Intelligent Cloud segment, which includes Azure public cloud, Windows Server, SQL Server, Nuance, and Enterprise Services, was $20 billion, an increase of $3. 3 billion dollars, or 22%. In the second quarter of 2023, earnings from this segment were $21. 51 billion, up 18% and above the analyst consensus of $21. 44. Revenue from Azure and other cloud services, which Microsoft reports only as a percentage, grew 31% and beat the average estimate of soaring about 30%. In the fiscal first quarter of 2023, the category grew 35%.
The following table shows the stable expansion of profits generated through Microsoft’s Intelligent Cloud sector over the years since 2015:
Intelligent cloud revenue since 2015 ($ billion)
Microsoft has been investing in its More Personal Computing segment with unwavering enthusiasm for decades, describing it as a composite of products and facilities designed to place consumers at the center of the pleasure of its technology. This segment includes the Windows operating system, Surface devices, gaming products, and search advertising and news. The profits generated through the More Personal Computing segment have grown over the years, as reflected in the table below.
The only exception so far has been 2023. In the first quarter of 2023, profits in the More Personal Computing sector decreased slightly: they fell 3% to $13. 3 billion. This decrease is explained by a reduction in the Windows OEM segment, partially offset by the expansion in the Windows Commercial segment. The second quarter also saw a decline in industry profits. Its profit was 14. 2 billion dollars, 19% and 16% less at constant exchange rates, below expectations. Windows OEM profits fell 39% year over year, as analysts had predicted.
Personal Computing Segment Profits Increase Since 2015 (Billion Dollars)
This year brought losses for Microsoft in its Games division, as its fourth-quarter gaming earnings showed declining performance. In the fourth quarter of fiscal 2022, Microsoft reported a year-over-year decline of $259 million, attributing the losses to the war in Ukraine that led the company to reduce its operations in Russia.
And yet, a 7% drop is not as drastic as it seems at first glance. People will be actively using Xbox in 2022, which shows that gaming on game consoles is still popular and successful for Microsoft. Despite the latest lackluster profit figures and expectations, although gamers will switch to their mobile devices to play, profits generated through the Xbox business continued to grow through 2022, reaching a record $15 billion last year. There are a hundred million gamers in 2022 who are willing to work on Xbox and take advantage of Consider betting PC games with the console as a more rewarding experience. Xbox subscriptions increased by 40% in 2021.
That year, gaming profits reached $16. 23 billion, up from $15. 37 billion in the previous fiscal year. In the fiscal first quarter of 2023, Microsoft’s gaming department raised $3. 61 billion, up from $3. 59 billion in the first quarter of last year. In the second fiscal quarter, the situation worsened. Led by Xbox content and services, its gaming business posted a 13% year-over-year drop in sales. It generated $4. 76 billion in the fourth quarter.
The chart below amply demonstrates that Xbox console gambling is not as obsolete as fiscal 2022 revenue suggests:
Microsoft Games since 2017 (USD billion)
Statistics show that the number of people who signed up for Xbox increased by 40% in 2021. Analysts at Techjury. com say that subscriptions to Game Pass and first-party and third-party Xbox titles were to blame for the increased interest in games last year. The first year of the pandemic was a success for Microsoft. Then, the number of Xbox users skyrocketed, from 65 million at the end of 2019 to 90 million in April 2020.
The statistics also revealed that about 18. 2% of people played video games for 4 to 7 hours per week in 2020. Soon after, the number of Xbox users reached one hundred million for the first time in Microsoft’s history. The progress of Microsoft Xbox users is shown in the following table:
Xbox since 2016
Microsoft Xbox One was introduced eight years after the Xbox 360 appeared on the market. A Game Pass arrived with the new game console. This was a long-awaited addition, as it allowed users to access many Microsoft video games for a monthly fee. More conveniently, the Xbox One had two versions: Xbox One S and Xbox One X, which differed in power and game resolution. According to the most recent estimates, Microsoft sold 50. 53 million Xbox consoles, which is a far cry from the 85. 8 million Xbox 360 units sold during its lifetime. In fact, sales of the console have lost steam over the years, as shown in the following table:
Xbox sets since 2013
Microsoft Xbox One also enjoys another degree of popularity in other regions of the world. Americans have been more in love with the console than with the countries. As of June 2022, lifetime unit sales of Xbox One consoles in North America reached 31. 58 million. In Europe, sales grew at a slower pace, reaching 12. 8 million, as shown in the table below:
Xbox One worldwide lifetime unit sales by region through June 2022
Microsoft has a busy schedule for the rest of the year and beyond, inspiring confidence in its bright future. It is very likely to catch up with Amazon in the Cloud Computing space. According to Canalys, Amazon Web Services had a 31% market share, while Microsoft came in second with a 24% market share. With such a small gap between companies, Microsoft has a chance to gain competitive advantage over the retail giant.
Microsoft is also actively running on the metaverse, a next-generation Internet edition, and HoloLens, true headsets combined for remote collaboration. A deal signed with video game publisher Activision Blizzard is expected to breathe new life into Microsoft’s loss-making games. business and hardware supply for your metaverse.
Microsoft is also working to breathe new life into its Bing search engine. Bing will never be able to stand up to Google, but thanks to OpenAI, Microsoft can tip the scales in favor of its underused search engine. OpenAI evolved ChatGPT, which answers complex questions conversationally, which Microsoft plans to upload to Bing. Microsoft recently invested $10 billion in OpenAI, the bulk of the $3 billion paid since 2019. Equipped with ChatGPT, Microsoft’s search engine could soon draw users away from Google, becoming its biggest rival, if not in your winner.
Given Microsoft’s grandiose plans for the future, analysts are optimistic about its expansion over the next five years, although this year the company came out weaker than expected. Analysts at Investors. com agree that Microsoft shares could rise as high as $334. 80. in the next year. A more positive view is that it could reach the $411 mark. Analysts also expect that by July 2027, Microsoft can double to $571. 98. If Microsoft meets analyst expectations and achieves its goals, it could become the most valuable publicly traded company in the world.
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