Here, I’d like to break down the major components of Microsoft’s business to help you better understand just how the software giant makes its money. Microsoft’s product portfolio is absolutely vast, but in order to keep things manageable, the company sorts its product offerings into three major reporting segments. The first is its productivity and business processes segment, which includes its Office and Dynamics product lines, as well as LinkedIn acquired back in Second is its intelligent cloud segment, which encompasses the company’s server products, cloud services, and enterprise services offerings. Data source: Microsoft K filing. As you can see, Microsoft’s revenue and operating income by segment were fairly evenly split — each segment is a large and important contributor to the company’s overall business.
Three major reporting segments
Thank you for your continued commitment and investment in Microsoft. Our tremendous progress and impact over the past year would not have been possible without your trust and belief in our mission. Fiscal was a record-breaking year for our company. I am proud of how we are helping organizations of every size in every industry innovate and thrive using our platforms and tools. And I am proud of how we are empowering everyone — consumers, students, teachers, and the more than 2 billion firstline workers around the world — with experiences to help them always feel confident, capable, and in control. Our mission to empower every person and every organization on the planet to achieve more has never been more important. At a time when many are calling attention to the role technology plays in society broadly, our mission remains constant. It grounds us in the enormous opportunity and responsibility we have to ensure that the technology we create always benefits everyone on the planet, including the planet itself. Our platforms and tools help make small businesses more productive, multinationals more competitive, nonprofits more effective, and governments more efficient. They improve healthcare and education outcomes, amplify human ingenuity, and allow people everywhere to reach higher. Today, every company is a technology company, and every organization will increasingly need to build its own proprietary technology solutions to compete and grow.
Ever wonder where the tech titan’s fat profits come from? Look no further.
I believe the next big technology breakthroughs will come not only from technology companies like Microsoft, but from retailers, healthcare providers, and manufacturers, working in partnership with us. Every day, we work alongside our customers and partners to help them build their own digital capability — innovating with them, creating new businesses with them, and earning their trust. We want them to become independent with us, not dependent on us. This era of the intelligent cloud and intelligent edge is shaping the next phase of innovation, powering intelligent systems and experiences that previously would have been unimaginable, and transforming nearly everything around us. Across our businesses, we are innovating to empower our customers, and investing in large and growing markets to help them digitally transform — today and long into the future. In a world where every company is a digital company, developers will play an increasingly vital role in value creation and growth across every industry, and GitHub is their home. Since our acquisition of GitHub last fall, growth has accelerated. Beyond GitHub, we are investing to build the most complete toolchain for developers — independent of language, framework, or cloud. Visual Studio and Visual Studio Code are now the most popular code-editing tools in the world.
Selected Financial Data
Everyone knows the tech industry is rich, but it can be challenging to get your head around just how much money it’s minting. Four of the industry’s giants — Facebook , Microsoft, Amazon and Google parent Alphabet — reported unexpectedly large profits this week. A fifth, Apple, releases earnings on Tuesday. These companies are the largest on Earth, at least in terms of their market value. Raw financial figures only tell you so much, though. Here are seven facts you might not know about the lucre the technology industry is rolling in. The five largest tech companies are collectively worth more than the entire economy of the United Kingdom. Only four national economies are larger than the combined tech giants: those of the U. The same five tech companies are worth more than the next 11 most valuable U. Apple makes roughly as much money every day as 2, average U. The two big tech companies you almost never pay directly — Google and Facebook — can afford to offer you free services thanks to their hammerlock on digital advertising.
Apple makes roughly as much money every day as 2,500 average U.S. households make in a year.
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Profit per second
Here, I’d like to break down the major components of Microsoft’s business to help you better understand just how the software giant makes its money. Microsoft’s product portfolio is absolutely vast, but in order to keep things manageable, the company sorts its product offerings into three major reporting segments. The first is its productivity and business processes segment, which includes its Office and Dynamics product lines, as well as LinkedIn acquired back in Second is its intelligent cloud segment, which encompasses the company’s server products, cloud services, and enterprise services offerings.
Data source: Microsoft K filing. As you can see, Microsoft’s revenue and operating income by segment were fairly evenly split — each segment is a large and important contributor to the company’s overall business. Now, Microsoft’s fiscal doex over yet, but it’s also worth looking at what the company has reported so far for each segment during the fiscal year:. Data source: Microsoft Q filing.
In the first half ofthe percentages of each business’s contribution to hiw company’s total revenue and operating income didn’t change relative to mohey full-year results, even though the magnitudes of those contributions changed slightly. It’s also important to understand that there are seasonal factors at play, so the percentage contributions of each business during the first half of might not tally exactly with ma,e the full-year results will ultimately be.
Microsoft is a diverse business that allows investors to gain exposure to a wide array of compelling technology trends. Indeed, Microsoft allows investors to participate in the stabilization of the PC market, the continued secular growth in gaming, the booming cloud computing market, and the ongoing need for productivity software. Oh, and if you were a fan of LinkedIn before it was acquired by Microsoft, owning Microsoft shares get you exposure to that business.
Updated: Apr 11, at AM. Published: Feb 19, at PM. He’s an experienced and passionate technology stock analyst and investor with focus on semiconductor companies. He holds a B. You can write to him at aeassa gmail. Image source: Microsoft.
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LinkedIn, GitHub, Surface, Cloud, and Gaming
Stock Screener. Revenue can be defined as the amount of money a company receives from its customers in exchange for the sales of goods or services. Revenue is the top line item on an income statement from which all costs and expenses are subtracted to arrive at net income.
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