Microsoft Corporation (MSFT) Bundle
A Brief History of Microsoft Corporation
As of 2024, Microsoft Corporation has established itself as a leader in the technology industry, continuing its evolution from a software company to a diversified technology and services powerhouse.
Company Overview
Founded in 1975 by Bill Gates and Paul Allen, Microsoft initially focused on software development, particularly for personal computers. The introduction of the Windows operating system in 1985 marked a significant milestone, leading to widespread adoption and establishing Microsoft as a dominant player in the software market.
Financial Performance
For the fiscal year ending September 30, 2024, Microsoft reported total revenue of $239.2 billion, reflecting a year-over-year increase of 10%. The revenue breakdown is as follows:
| Segment | Revenue (in billions) |
|---|---|
| Productivity and Business Processes | $66.5 |
| Intelligent Cloud | $91.5 |
| More Personal Computing | $81.2 |
Net Income and Earnings Per Share
Microsoft's net income for the same period was $72.3 billion, with a diluted earnings per share (EPS) of $9.66, an increase from $8.57 in the previous fiscal year.
Shareholder Returns
In Q1 2025, Microsoft returned $9.0 billion to shareholders through share repurchases and dividends. The dividend declared on September 16, 2024, was $0.83 per share, totaling $6.2 billion, compared to $5.6 billion in the same quarter of the previous year.
Recent Acquisitions
In October 2023, Microsoft completed its acquisition of Activision Blizzard for $75.4 billion. This acquisition is expected to enhance Microsoft's gaming portfolio significantly, integrating Activision's popular franchises into its offerings.
Market Position and Valuation
As of September 30, 2024, Microsoft's market capitalization stood at approximately $2.45 trillion. The company maintains a strong position in the technology sector, driven by its cloud services and enterprise solutions.
Debt and Liquidity
Microsoft's long-term debt as of September 30, 2024, was $42.9 billion, with an estimated fair value of $44.6 billion. The company has a robust cash position, holding $11.6 billion in cash and cash equivalents, which supports its ongoing investments and shareholder returns.
Future Outlook
Looking ahead, Microsoft aims to continue its growth trajectory through investments in cloud computing, artificial intelligence, and gaming. The company's strategic initiatives are expected to strengthen its competitive edge and drive long-term shareholder value.
Key Financial Metrics
| Metric | Value |
|---|---|
| Total Revenue (FY 2024) | $239.2 billion |
| Net Income | $72.3 billion |
| Diluted EPS | $9.66 |
| Market Capitalization | $2.45 trillion |
| Long-term Debt | $42.9 billion |
| Cash and Cash Equivalents | $11.6 billion |
A Who Owns Microsoft Corporation (MSFT)
Major Shareholders
As of 2024, the ownership structure of Microsoft Corporation is characterized by a mix of institutional investors, mutual funds, and individual stakeholders. The following table outlines the major shareholders of Microsoft Corporation:
| Shareholder Type | Ownership Percentage | Number of Shares (in millions) | Estimated Value (in billions) |
|---|---|---|---|
| Vanguard Group | 8.4% | 626.4 | $191.4 |
| BlackRock, Inc. | 7.4% | 550.8 | $167.1 |
| Bill Gates | 1.3% | 97.1 | $29.4 |
| State Street Corporation | 4.0% | 297.8 | $89.9 |
| Other Institutional Investors | 15.8% | 1174.0 | $354.0 |
| Retail Investors | 63.1% | 4600.0 | $1380.0 |
Insider Ownership
Insider ownership is also a significant aspect of Microsoft's ownership structure. Key executives and board members hold shares in the company, contributing to the overall ownership landscape:
| Name | Position | Shares Owned (in millions) | Percentage of Total Shares |
|---|---|---|---|
| Satya Nadella | CEO | 1.0 | 0.01% |
| Brad Smith | President | 0.2 | 0.002% |
| Other Executives | Various | 1.5 | 0.02% |
Stock Performance
Microsoft's stock performance is a reflection of its strong market position. As of September 30, 2024, the stock price was approximately $305.00, with a market capitalization of around $2.27 trillion. The following table provides a summary of recent stock performance metrics:
| Metric | Value |
|---|---|
| Current Stock Price | $305.00 |
| Market Capitalization | $2.27 trillion |
| 52-Week High | $317.00 |
| 52-Week Low | $232.00 |
| Dividend Yield | 1.08% |
Institutional Ownership Trends
Institutional ownership has shown a steady increase over the years. As of 2024, institutional investors collectively own about 30% of Microsoft's shares:
| Year | Institutional Ownership Percentage |
|---|---|
| 2021 | 28.5% |
| 2022 | 29.0% |
| 2023 | 29.5% |
| 2024 | 30.0% |
Conclusion of Ownership Structure
Overall, Microsoft Corporation remains a widely held company with diverse ownership, including significant institutional and retail investor participation. The company's strategic direction under its leadership continues to attract investment interest, solidifying its position in the technology sector.
Microsoft Corporation (MSFT) Mission Statement
Microsoft Corporation's mission statement as of 2024 is to "empower every person and every organization on the planet to achieve more." This reflects its commitment to providing a wide range of products and services, particularly in the areas of cloud computing and artificial intelligence, designed to enhance productivity and foster innovation.
Financial Performance Overview
In the first quarter of fiscal year 2025, Microsoft reported significant financial results:
| Metric | Q1 FY 2025 | Q1 FY 2024 | Percentage Change |
|---|---|---|---|
| Revenue | $65,585 million | $56,517 million | 16% |
| Gross Margin | $45,486 million | $40,215 million | 13% |
| Operating Income | $30,552 million | $26,895 million | 14% |
| Net Income | $24,667 million | $22,291 million | 11% |
| Diluted Earnings per Share | $3.30 | $2.99 | 10% |
Segment Revenue Breakdown
The revenue generated from different business segments showcases Microsoft's diverse portfolio:
| Segment | Q1 FY 2025 Revenue | Q1 FY 2024 Revenue | Percentage Change |
|---|---|---|---|
| Productivity and Business Processes | $28,317 million | $25,226 million | 12% |
| Intelligent Cloud | $24,092 million | $20,013 million | 20% |
| More Personal Computing | $13,176 million | $11,278 million | 17% |
Cloud Revenue Growth
Microsoft Cloud revenue, which encompasses Microsoft 365 and Azure, has shown remarkable growth:
- Q1 FY 2025 Cloud Revenue: $38.9 billion
- Q1 FY 2024 Cloud Revenue: $31.9 billion
- Percentage Increase: 22%
Unearned Revenue
As of September 30, 2024, the breakdown of unearned revenue across segments is as follows:
| Segment | Unearned Revenue (in millions) |
|---|---|
| Productivity and Business Processes | $40,429 |
| Intelligent Cloud | $12,397 |
| More Personal Computing | $2,863 |
| Total Unearned Revenue | $55,689 |
Investment in Research and Development
Microsoft continues to invest heavily in research and development to support its mission:
- R&D Expenses for Q1 FY 2025: $7,544 million
- R&D Expenses for Q1 FY 2024: $6,659 million
- Percentage Increase: 13%
Shareholder Returns
Microsoft remains committed to returning capital to its shareholders:
- Dividends declared in Q1 FY 2025: $6.2 billion
- Dividends declared in Q1 FY 2024: $5.6 billion
- Share repurchases in Q1 FY 2025: $2.8 billion
- Share repurchases in Q1 FY 2024: $3.6 billion
How Microsoft Corporation (MSFT) Works
Business Segments
Microsoft operates through three main segments:
- Productivity and Business Processes
- Intelligent Cloud
- More Personal Computing
Financial Performance Overview
For the three months ended September 30, 2024, Microsoft reported:
| Metric | Q1 2025 (2024) | Q1 2024 (2023) | Percentage Change |
|---|---|---|---|
| Revenue | $65,585 million | $56,517 million | 16% |
| Gross Margin | $45,486 million | $40,215 million | 13% |
| Operating Income | $30,552 million | $26,895 million | 14% |
| Net Income | $24,667 million | $22,291 million | 11% |
| Diluted Earnings Per Share | $3.30 | $2.99 | 10% |
Segment Results
The following table highlights the revenue and operating income by segment for the same period:
| Segment | Revenue (Q1 2025) | Revenue (Q1 2024) | Operating Income (Q1 2025) | Operating Income (Q1 2024) | Percentage Change (Revenue) |
|---|---|---|---|---|---|
| Productivity and Business Processes | $28,317 million | $25,226 million | $16,516 million | $14,297 million | 12% |
| Intelligent Cloud | $24,092 million | $20,013 million | $10,503 million | $8,908 million | 20% |
| More Personal Computing | $13,176 million | $11,278 million | $3,533 million | $3,690 million | 17% |
Revenue Breakdown
Revenue by major product and service offerings is as follows:
| Product/Service | Revenue (Q1 2025) | Revenue (Q1 2024) |
|---|---|---|
| Server products and cloud services | $22,155 million | $18,062 million |
| Microsoft 365 Commercial products and cloud services | $20,449 million | $18,044 million |
| Gaming | $5,621 million | $3,919 million |
| Windows and Devices | $4,329 million | $4,340 million |
| $4,292 million | $3,913 million | |
| Search and news advertising | $3,225 million | $3,018 million |
| Enterprise and partner services | $1,928 million | $1,944 million |
| Dynamics products and cloud services | $1,849 million | $1,626 million |
| Microsoft 365 Consumer products and cloud services | $1,727 million | $1,643 million |
Operational Costs and Expenses
For the three months ended September 30, 2024, Microsoft incurred the following operational costs:
| Expense Type | Amount (Q1 2025) | Amount (Q1 2024) |
|---|---|---|
| Cost of Revenue | $20,099 million | $16,302 million |
| Research and Development | $7,544 million | $6,659 million |
| Sales and Marketing | $5,717 million | $5,187 million |
| General and Administrative | $1,673 million | $1,474 million |
Cash Flow Statement
The cash flow statement for the three months ended September 30, 2024 is summarized as follows:
| Cash Flow Activity | Amount (Q1 2025) | Amount (Q1 2024) |
|---|---|---|
| Net Cash from Operations | $34,180 million | $30,583 million |
| Net Cash Used in Investing | ($15,201 million) | $503 million |
| Net Cash from (Used in) Financing | ($16,576 million) | $14,761 million |
Balance Sheet Overview
As of September 30, 2024, the balance sheet reported the following:
| Metric | Amount |
|---|---|
| Total Assets | $523,013 million |
| Total Liabilities | $235,290 million |
| Stockholders' Equity | $287,723 million |
How Microsoft Corporation (MSFT) Makes Money
Revenue Segments Overview
Microsoft operates through three primary segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. For the three months ending September 30, 2024, Microsoft reported total revenue of $65.585 billion, reflecting a 16% increase from $56.517 billion in the same period of 2023.
| Segment | Revenue (Q1 2025) | Revenue (Q1 2024) | Percentage Change |
|---|---|---|---|
| Productivity and Business Processes | $28,317 million | $25,226 million | 12% |
| Intelligent Cloud | $24,092 million | $20,013 million | 20% |
| More Personal Computing | $13,176 million | $11,278 million | 17% |
Productivity and Business Processes
This segment includes Microsoft 365 Commercial and Consumer products, LinkedIn, and Dynamics. In Q1 2025, this segment generated $28.317 billion, with growth driven by:
- Microsoft 365 Commercial products and cloud services revenue increased by $2.4 billion or 13%.
- LinkedIn revenue rose by $379 million or 10%.
- Dynamics products and cloud services revenue increased by $223 million or 14%.
Intelligent Cloud
This segment encompasses Azure and server products. Revenue in this segment increased by 20% to $24.092 billion, attributed to:
- Azure and other cloud services revenue grew 33% due to heightened demand, including a 12-point contribution from AI services.
- Server products revenue saw a slight decline of 1% due to lower transactional purchasing.
More Personal Computing
This segment includes Windows, Devices, and Gaming. Revenue increased by 17% to $13.176 billion, influenced by:
- Gaming revenue surged by $1.7 billion or 43%, primarily from Xbox content and services, which rose 61% due to the Activision Blizzard acquisition.
- Windows OEM and Devices revenue increased by 2%.
Cost Structure and Profitability
For the three months ended September 30, 2024, Microsoft reported a gross margin of $45.486 billion, up from $40.215 billion a year earlier. The overall gross margin percentage decreased slightly, attributed to:
- Cost of revenue increased by $3.8 billion or 23%, driven by growth in Microsoft Cloud and Gaming.
- Operating expenses increased by $1.6 billion or 12%, mainly due to Gaming expenditures and investments in cloud engineering.
Net Income and Earnings Per Share
Microsoft's net income for the quarter was $24.667 billion, reflecting an 11% increase from $22.291 billion in Q1 2024. Diluted earnings per share were $3.30, up from $2.99 the previous year.
| Metric | Q1 2025 | Q1 2024 | Percentage Change |
|---|---|---|---|
| Net Income | $24,667 million | $22,291 million | 11% |
| Diluted Earnings Per Share | $3.30 | $2.99 | 10% |
Cash Flow and Investments
Microsoft's cash from operations increased by $3.6 billion to $34.2 billion for the three months ended September 30, 2024. Notable cash flows include:
- Cash paid for common stock dividends was $5.574 billion.
- Investments in property and equipment totaled $14.923 billion.
Future Revenue Recognition
As of September 30, 2024, Microsoft reported unearned revenue of $55.689 billion, with expected future recognition detailed below:
| Period | Unearned Revenue (in millions) |
|---|---|
| December 31, 2024 | $24,279 |
| March 31, 2025 | $16,953 |
| June 30, 2025 | $9,620 |
| September 30, 2025 | $2,174 |
| Thereafter | $2,663 |
| Total | $55,689 |
Conclusion of Financial Performance
Microsoft's diversified revenue streams from cloud services, productivity tools, and gaming contribute significantly to its financial strength. The company's ability to adapt to market demands, particularly in the cloud and AI sectors, positions it for continued growth.
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Article updated on 8 Nov 2024
Resources:
- Microsoft Corporation (MSFT) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of Microsoft Corporation (MSFT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Microsoft Corporation (MSFT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.