As a Premium user you get access to the detailed source references and background information about this statistic. We evaluate our reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Azure Space is extending Azure capabilities through worldwide satellite-based connectivity. We evaluated the appropriateness and consistency of managements methods and assumptions used in the identification, recognition, measurement, and disclosure of uncertain tax positions, which included testing the effectiveness of the related internal controls. The fair values of these investments approximate their carrying values. For full-year FY 2021, analysts forecast that adjusted EPS will rise 34.1% as annual revenue climbs 16.2%. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by original equipment manufacturers (OEM), to drive traffic to our websites, and to acquire online advertising space; costs incurred to support and maintain online products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Compensation expense for the employee stock purchase plan (ESPP) is measured as the discount the employee is entitled to upon purchase and is recognized in the period of purchase. As of June 30, 2021, we employed approximately 181,000 people on a full-time basis, 103,000 in the U.S. and 78,000 internationally. We have not received a proposed assessment for the unresolved key transfer pricing issues and do not expect a final resolution of these issues in the next 12 months. The following table outlines the expected future recognition of unearned revenue as of June 30, 2021: If our customers choose to license cloud-based versions of our products and services rather than licensing transaction-based products and services, the associated revenue will shift from being recognized at the time of the transaction to being recognized over the subscription period or upon consumption, as applicable. Gross margin percentage increased with the change in estimated useful lives of our server and network equipment. We believe our gaming platform is effectively positioned against, and uniquely differentiated from, competitive products and services based on significant innovation in hardware architecture, user interface, developer tools, online gaming and entertainment services, and continued strong exclusive content from our own first-party game franchises as well as other digital content offerings. To navigate it, organizations will need to embrace flexibility across their entire operating model, including the ways people work, the places they inhabit, and how they manage business process. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of ZeniMax. Our EEO-1 report (equal employment opportunity). We settled a portion of the Internal Revenue Service (IRS) audit for tax years 2004 to 2006 in fiscal year 2011. For hardware warranties, we estimate the costs based on historical and projected product failure rates, historical and projected repair costs, and knowledge of specific product failures (if any). Enterprise Agreements offer large organizations a manageable volume licensing program that gives them the flexibility to buy cloud services and software licenses under one agreement. How we develop and use AI is also a critical component of trust. SA conveys rights to new software and upgrades for perpetual licenses released over the contract period. Assessed the terms in the customer agreement and evaluated the appropriateness of managements application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Finally, Learning Solutions, including Glint, help businesses close critical skills gaps in times where companies are having to do more with existing talent. The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. Azure enables customers to devote more resources to development and use of applications that benefit their organizations, rather than managing on-premises hardware and software. The proceeds of these issuances were or will be used for general corporate purposes, which may include, among other things, funding for working capital, capital expenditures, repurchases of capital stock, acquisitions, and repayment of existing debt. The segment amounts included in MD&A are presented on a basis consistent with our internal management reporting. Microsoft Teams, Azure and security all helped push . Microsoft Mesh enables presence and shared experiences from anywhere through mixed reality applications. We strive to obtain information as early as possible about changing usage patterns and hardware advances that may affect software and hardware design. As of June 30, 2021 and 2020, our financing receivables, net were $4.4 billion and $5.2 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. As organizations focus on creating their own technology solutions, they will need standardized tools to modernize existing apps and build new ones. Our goal is to foster innovation that generates new ecosystems of inventors, partners, developers, creators, changemakers, public servants, frontline workers, and knowledge workers who, together, drive the engines of growth and opportunity in ways that benefit everyone. It is possible that the information we post on social media could be deemed to be material to investors. Building and running cloud-based services in ways that unleash new experiences and opportunities for businesses and individuals. In addition to our main research and development operations, we also operate Microsoft Research. We support the fundamental rights of all people. We generate revenue by offering a wide range of cloud-based and other services to people and businesses; licensing and supporting an array of software products; designing, manufacturing, and selling devices; and delivering relevant online advertising to a global audience. The figure also lagged the Zacks Consensus Estimate of $255 million. Our responsibility is to express an opinion on the Companys financial statements based on our audits. Sales and marketing included an unfavorable foreign currency impact of 2%. Refer to Note 16 Stockholders Equity of the Notes to Financial Statements for further discussion. Outcomes: The segment generated revenues of $66 million (14.1% of total revenues), up 4% on a year-over-year basis due to higher software license and product sales partly offset by EMEA prepay . Microsoft 365 Consumer subscribers increased 22% to 51.9 million. Stock awards generally vest over a service period of four years or five years. Windows IoT extends the power of Windows and the cloud to intelligent systems by delivering specialized operating systems, tools, and services for use in embedded devices. Judgment is required in determining when technological feasibility of a product is established. Making a difference in the lives of each other, our customers, and the world around us. See Note 12 Income Taxes of the Notes to Financial Statements for further discussion. We also expanded existing programs such as our Microsoft CARES Employee Assistance Program and family backup care. We compete to provide enterprise-wide computing solutions and point solutions with numerous commercial software vendors that offer solutions and middleware technology platforms, software applications for connectivity (both Internet and intranet), security, hosting, database, and e-business servers. CALs provide access rights to certain server products, including SQL Server and Windows Server, and revenue is reported along with the associated server product. Across our solution areas, we are delivering platforms and tools that expand our opportunity to help organizations around the world build their own tech intensity. Refer to Managements Discussion and Analysis of Financial Condition and Results of Operations for further discussion regarding the impact of COVID-19 on our fiscal year 2021 financial results. But in addition to the top line, also pay close . Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. We will continue to invest in sales, marketing, product support infrastructure, and existing and advanced areas of technology, as well as continue making acquisitions that align with our business strategy. We monitor our foreign currency exposures daily to maximize the economic effectiveness of our foreign currency positions, including hedges. You need at least a Starter Account to use this feature. GO RESET FILTER. Microsoft annual revenue for 2020 was $143.015B, a 13.65% increase from 2019. Cash used in investing increased $15.4 billion to $27.6 billion for fiscal year 2021, mainly due to a $6.4 billion increase in cash used for acquisitions of companies, net of cash acquired, and purchases of intangible and other assets, a $5.2 billion increase in additions to property and equipment, and a $4.1 billion decrease in cash from net investment purchases, sales, and maturities. We applied a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align our credit loss methodology with the new standard. We also are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our business. We use a single amount to estimate SSP for items that are not sold separately, including on-premises licenses sold with SA or software updates provided at no additional charge. services revenue growth, Revenue from Windows Commercial products and cloud services, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings, Revenue from Surface devices and accessories, Revenue from Xbox content and services, comprising digital transactions, Xbox Game Pass and other subscriptions, video games, third-party video game royalties, cloud services, and advertising, Search advertising revenue, excluding TAC, growth, Revenue from search advertising excluding traffic acquisition costs (TAC) paid to Bing Ads network publishers. These estimates and assumptions are affected by managements application of accounting policies, as well as uncertainty in the current economic environment due to COVID-19. If recognized, the resulting tax benefit would affect our effective tax rates for fiscal years 2021, 2020, and 2019 by $12.5 billion, $12.1 billion, and $12.0 billion, respectively. We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. We evaluated the reasonableness of managements estimates by considering how tax law, including statutes, regulations and case law, impacted managements judgments. You need a Statista Account for unlimited access. In addition to the operations centers, we also operate datacenters throughout the Americas, Europe, Australia, and Asia, as well as in the Middle East and Africa. This is why we introduced Microsoft Viva, which brings the information, resources, and support employees need to stay connected to each other and their companys mission directly into the flow of work. Apple and Microsoft are both great companies to own. We monitor our foreign currency exposures daily to maximize the economic effectiveness of our foreign currency hedge positions. Microsoft Corporation's quarterly revenue almost tripled within the last 12 years, increasing from 14.45 billion U.S. dollars in the third . Our contracts with customers often include promises to transfer multiple products and services to a customer. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets in our consolidated balance sheets. Net gains on derivatives decreased due to lower gains on foreign currency contracts. The purchase price allocation as of the date of acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. 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