8-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) January 24, 2023

 

 

Microsoft Corporation

 

 

 

Washington   001-37845   91-1144442

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

One Microsoft Way, Redmond, Washington   98052-6399

(425) 882-8080

www.microsoft.com/investor

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading Symbol

  

Name of exchange on which registered

Common stock, $0.00000625 par value per share    MSFT    NASDAQ
3.125% Notes due 2028    MSFT    NASDAQ
2.625% Notes due 2033    MSFT    NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


Item 2.02. Results of Operations and Financial Condition

On January 24, 2023, Microsoft Corporation issued a press release announcing its financial results for the fiscal quarter ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits:

 

99.1   

Press release, dated January 24, 2023, issued by Microsoft Corporation

104   

Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

     MICROSOFT CORPORATION
   (Registrant)

Date: January 24, 2023

  

/S/ ALICE L. JOLLA

   Alice L. Jolla
   Corporate Vice President and Chief Accounting
Officer
EX-99.1

Exhibit 99.1

Microsoft Cloud Strength Drives Second Quarter Results

REDMOND, Wash. — January 24, 2023 — Microsoft Corp. today announced the following results for the quarter ended December 31, 2022, as compared to the corresponding period of last fiscal year:

 

   

Revenue was $52.7 billion and increased 2%

   

Operating income was $20.4 billion GAAP and $21.6 billion non-GAAP, and decreased 8% and 3%, respectively

   

Net income was $16.4 billion GAAP and $17.4 billion non-GAAP, and decreased 12% and 7%, respectively

   

Diluted earnings per share was $2.20 GAAP and $2.32 non-GAAP, and decreased 11% and 6%, respectively

“The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” said Satya Nadella, chairman and chief executive officer of Microsoft. “We are committed to helping our customers use our platforms and tools to do more with less today and innovate for the future in the new era of AI.”

“We are focused on operational excellence as we continue to invest to drive growth. Microsoft Cloud revenue was $27.1 billion, up 22% (up 29% in constant currency) year-over-year as our commercial offerings continue to drive value for our customers,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

The following table reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

 

      Three Months Ended December 31,  

   ($ in millions, except per share amounts)

 

  

  Revenue  

 

    

  Operating  
  Income  

 

    

  Net Income  

 

    

Diluted
  Earnings per  
  Share  

 

 

  2021 As Reported (GAAP)

  

 

$51,728

 

  

 

$22,247

 

  

 

$18,765

 

  

 

$2.48

 

  2022 As Reported (GAAP)

  

 

$52,747

 

  

 

$20,399

 

  

 

$16,425

 

  

 

$2.20

 

  Severance, hardware-related impairment, and lease consolidation costs

  

 

—  

 

  

 

1,171

 

  

 

946

 

  

 

0.12

 

  2022 As Adjusted

  

 

$52,747

 

  

 

$21,570

 

  

 

$17,371

 

  

 

$2.32

 

  Percentage Change Y/Y (GAAP)

  

 

2%

 

  

 

(8)%

 

  

 

(12)%

 

  

 

(11)%

 

  Percentage Change Y/Y Constant Currency

  

 

7%

 

  

 

0%

 

  

 

(4)%

 

  

 

(3)%

 

  Percentage Change Y/Y (As Adjusted)

  

 

2%

 

  

 

(3)%

 

  

 

(7)%

 

  

 

(6)%

 

  Percentage Change Y/Y (As Adjusted) Constant Currency

  

 

7%

 

  

 

6%

 

  

 

1%

 

  

 

2%

 


Business Highlights

Revenue in Productivity and Business Processes was $17.0 billion and increased 7% (up 13% in constant currency), with the following business highlights:

 

   

Office Commercial products and cloud services revenue increased 7% (up 14% in constant currency) driven by Office 365 Commercial revenue growth of 11% (up 18% in constant currency)

   

Office Consumer products and cloud services revenue decreased 2% (up 3% in constant currency) and Microsoft 365 Consumer subscribers grew to 63.2 million

   

LinkedIn revenue increased 10% (up 14% in constant currency)

   

Dynamics products and cloud services revenue increased 13% (up 20% in constant currency) driven by Dynamics 365 revenue growth of 21% (up 29% in constant currency)

Revenue in Intelligent Cloud was $21.5 billion and increased 18% (up 24% in constant currency), with the following business highlights:

 

   

Server products and cloud services revenue increased 20% (up 26% in constant currency) driven by Azure and other cloud services revenue growth of 31% (up 38% in constant currency)

Revenue in More Personal Computing was $14.2 billion and decreased 19% (down 16% in constant currency), with the following business highlights:

 

   

Windows OEM revenue decreased 39%

   

Windows Commercial products and cloud services revenue decreased 3% (up 3% in constant currency)

   

Xbox content and services revenue decreased 12% (down 8% in constant currency)

   

Search and news advertising revenue excluding traffic acquisition costs increased 10% (up 15% in constant currency)

   

Devices revenue decreased 39% (down 34% in constant currency)

Microsoft returned $9.7 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2023, a decrease of 11% compared to the second quarter of fiscal year 2022.

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Quarterly Highlights, Product Releases, and Enhancements

Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.

Here are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.


Environmental, Social, and Governance (ESG)

To better execute on Microsoft’s mission, we focus our Environmental, Social, and Governance (ESG) efforts where we can have the most positive impact. To learn more about our latest initiatives and priorities, please visit our investor relations ESG website.

Webcast Details

Satya Nadella, chairman and chief executive officer, Amy Hood, executive vice president and chief financial officer, Alice Jolla, chief accounting officer, Keith Dolliver, deputy general counsel, and Brett Iversen, vice president of investor relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor. The webcast will be available for replay through the close of business on January 24, 2024.

Non-GAAP Definition

Q2 charge. In the second quarter of fiscal year 2023, Microsoft recorded costs related to decisions announced on January 18th, including employee severance expenses of $800 million, impairment charges resulting from changes to our hardware portfolio, and costs related to lease consolidation activities.

Microsoft has provided non-GAAP financial measures related to the impact of these strategic reprioritization actions to aid investors in better understanding our performance. Microsoft believes these non-GAAP measures assist investors by providing additional insight into its operational performance and help clarify trends affecting its business. For comparability of reporting, management considers non-GAAP measures in conjunction with GAAP financial results in evaluating business performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Constant Currency

Microsoft presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft has provided this non-GAAP financial information to aid investors in better understanding our performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.


Financial Performance Constant Currency Reconciliation

 

     

Three Months Ended December 31,

 

 
   ($ in millions, except per share amounts)      Revenue          Operating  
  Income  
       Net Income        Diluted
  Earnings per  
  Share  
 

  2021 As Reported (GAAP)

  

 

$51,728

 

  

 

$22,247

 

  

 

$18,765

 

  

 

$2.48

 

  2022 As Reported (GAAP)

  

 

$52,747

 

  

 

$20,399

 

  

 

$16,425

 

  

 

$2.20

 

  2022 As Adjusted

  

 

$52,747

 

  

 

$21,570

 

  

 

$17,371

 

  

 

$2.32

 

  Percentage Change Y/Y (GAAP)

  

 

2%

 

  

 

(8)%

 

  

 

(12)%

 

  

 

(11)%

 

  Percentage Change Y/Y (As Adjusted)

  

 

2%

 

  

 

(3)%

 

  

 

(7)%

 

  

 

(6)%

 

  Constant Currency Impact

  

 

$(2,645)

 

  

 

$(1,931)

 

  

 

$(1,563)

 

  

 

$(0.21)

 

  Percentage Change Y/Y Constant Currency

  

 

7%

 

  

 

0%

 

  

 

(4)%

 

  

 

(3)%

 

  Percentage Change Y/Y (As Adjusted) Constant Currency

  

 

7%

 

  

 

6%

 

  

 

1%

 

  

 

2%

 

Segment Revenue Constant Currency Reconciliation

 

     

Three Months Ended December 31,

 

 

   ($ in millions)

 

  

Productivity and

Business Processes

 

    

Intelligent Cloud

 

    

More Personal
      Computing      

 

 

  2021 As Reported (GAAP)

  

 

$15,936

 

  

 

$18,262

 

  

 

$17,530

 

  2022 As Reported (GAAP)

  

 

$17,002

 

  

 

$21,508

 

  

 

$14,237

 

  Percentage Change Y/Y (GAAP)

  

 

7%

 

  

 

18%

 

  

 

(19)%

 

  Constant Currency Impact

  

 

$(1,002)

 

  

 

$(1,078)

 

  

 

$(565)

 

  Percentage Change Y/Y Constant Currency

  

 

13%

 

  

 

24%

 

  

 

(16)%

 

We have recast certain prior period amounts to conform to the way we internally manage and monitor our business.


Selected Product and Service Revenue Constant Currency Reconciliation    

 

     

Three Months Ended December 31, 2022

 

 
     

Percentage Change
Y/Y (GAAP)

 

    

Constant Currency

Impact

 

    

Percentage Change
Y/Y Constant

Currency

 

 

  Microsoft Cloud revenue

  

 

22%

 

  

 

7%

 

  

 

29%

 

  Office Commercial products and cloud services

  

 

7%

 

  

 

7%

 

  

 

14%

 

  Office 365 Commercial

  

 

11%

 

  

 

7%

 

  

 

18%

 

  Office Consumer products and cloud services

  

 

(2)%

 

  

 

5%

 

  

 

3%

 

  LinkedIn

  

 

10%

 

  

 

4%

 

  

 

14%

 

  Dynamics products and cloud services

  

 

13%

 

  

 

7%

 

  

 

20%

 

  Dynamics 365

  

 

21%

 

  

 

8%

 

  

 

29%

 

  Server products and cloud services

  

 

20%

 

  

 

6%

 

  

 

26%

 

  Azure and other cloud services

  

 

31%

 

  

 

7%

 

  

 

38%

 

  Windows OEM

  

 

(39)%

 

  

 

0%

 

  

 

(39)%

 

  Windows Commercial products and cloud services

  

 

(3)%

 

  

 

6%

 

  

 

3%

 

  Xbox content and services

  

 

(12)%

 

  

 

4%

 

  

 

(8)%

 

  Search and news advertising excluding traffic acquisition costs

  

 

10%

 

  

 

5%

 

  

 

15%

 

  Devices

  

 

(39)%

 

  

 

5%

 

  

 

(34)%

 

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

 

   

intense competition in all of our markets that may lead to lower revenue or operating margins;

 

   

increasing focus on cloud-based services presenting execution and competitive risks;

 

   

significant investments in products and services that may not achieve expected returns;

 

   

acquisitions, joint ventures, and strategic alliances that may have an adverse effect on our business;

 

   

impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;

 

   

cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position;

 

   

disclosure and misuse of personal data that could cause liability and harm to our reputation;


   

the possibility that we may not be able to protect information stored in our products and services from use by others;

 

   

abuse of our advertising, professional, marketplace, or gaming platforms that may harm our reputation or user engagement;

 

   

the development of the internet of things presenting security, privacy, and execution risks;

 

   

issues about the use of artificial intelligence in our offerings that may result in competitive harm, legal liability, or reputational harm;

 

   

excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;

 

   

quality or supply problems;

 

   

government litigation and regulatory activity relating to competition rules that may limit how we design and market our products;

 

   

potential consequences under trade, anti-corruption, and other laws resulting from our global operations;

 

   

laws and regulations relating to the handling of personal data that may impede the adoption of our services or result in increased costs, legal claims, fines, or reputational damage;

 

   

claims against us that may result in adverse outcomes in legal disputes;

 

   

uncertainties relating to our business with government customers;

 

   

additional tax liabilities;

 

   

the possibility that we may fail to protect our source code;

 

   

legal changes, our evolving business model, piracy, and other factors may decrease the value of our intellectual property;

 

   

claims that Microsoft has infringed the intellectual property rights of others;

 

   

damage to our reputation or our brands that may harm our business and operating results;

 

   

adverse economic or market conditions that may harm our business;

 

   

catastrophic events or geo-political conditions, such as the COVID-19 pandemic, that may disrupt our business;

 

   

exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange and

 

   

the dependence of our business on our ability to attract and retain talented employees.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/en-us/investor.


All information in this release is as of December 31, 2022. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, press only:

Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777, rrt@we-worldwide.com

For more information, financial analysts and investors only:

Brett Iversen, Vice President, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at http://www.microsoft.com/en-us/investor.


MICROSOFT CORPORATION

INCOME STATEMENTS

(In millions, except per share amounts) (Unaudited)

 

    

Three Months Ended
December 31,

    

Six Months Ended
December 31,

 

 

  

         2022

    

         2021

    

         2022

    

         2021

 

 

 

 Revenue:

     

 

 

 

  

 

 

 

  

 

 

 

 Product

  

 

$16,517 

 

  

 

$20,779 

 

  

 

$32,258 

 

  

 

$37,410 

 

 Service and other

  

 

36,230 

 

  

 

30,949 

 

  

 

70,611 

 

  

 

59,635 

 

 

    

 

 

    

 

 

    

 

 

 

 Total revenue

  

 

52,747 

 

  

 

51,728 

 

  

 

102,869 

 

  

 

97,045 

 

 

    

 

 

    

 

 

    

 

 

 

 Cost of revenue:

     

 

 

 

  

 

 

 

  

 

 

 

 Product

  

 

5,690 

 

  

 

6,331 

 

  

 

9,992 

 

  

 

10,123 

 

 Service and other

  

 

11,798 

 

  

 

10,629 

 

  

 

22,948 

 

  

 

20,483 

 

 

    

 

 

    

 

 

    

 

 

 

 Total cost of revenue

  

 

17,488 

 

  

 

16,960 

 

  

 

32,940 

 

  

 

30,606 

 

 

    

 

 

    

 

 

    

 

 

 

 Gross margin

  

 

35,259 

 

  

 

34,768 

 

  

 

69,929 

 

  

 

66,439 

 

 Research and development

  

 

6,844 

 

  

 

5,758 

 

  

 

13,472 

 

  

 

11,357 

 

 Sales and marketing

  

 

5,679 

 

  

 

5,379 

 

  

 

10,805 

 

  

 

9,926 

 

 General and administrative

  

 

2,337 

 

  

 

1,384 

 

  

 

3,735 

 

  

 

2,671 

 

 

    

 

 

    

 

 

    

 

 

 

 Operating income

  

 

20,399 

 

  

 

22,247 

 

  

 

41,917 

 

  

 

42,485 

 

 Other income (expense), net

  

 

(60) 

 

  

 

268 

 

  

 

(6) 

 

  

 

554 

 

 

    

 

 

    

 

 

    

 

 

 

 Income before income taxes

  

 

20,339 

 

  

 

22,515 

 

  

 

41,911 

 

  

 

43,039 

 

 Provision for income taxes

  

 

3,914 

 

  

 

3,750 

 

  

 

7,930 

 

  

 

3,769 

 

 

    

 

 

    

 

 

    

 

 

 

 Net income

  

 

$16,425 

 

  

 

$18,765 

 

  

 

$33,981 

 

  

 

$39,270 

 

  

 

 

    

 

 

    

 

 

    

 

 

 

 Earnings per share:

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 Basic

  

 

$2.20 

 

  

 

$2.50 

 

  

 

$4.56 

 

  

 

$5.23 

 

 Diluted

  

 

$2.20 

 

  

 

$2.48 

 

  

 

$4.54 

 

  

 

$5.19 

 

 Weighted average shares outstanding:

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

 Basic

  

 

7,451 

 

  

 

7,505 

 

  

 

7,454 

 

  

 

7,509 

 

 Diluted

  

 

7,473 

 

  

 

7,555 

 

  

 

7,479 

 

  

 

7,561 

 

 

 


COMPREHENSIVE INCOME STATEMENTS

(In millions) (Unaudited)

 

    

Three Months Ended
December 31,

    

Six Months Ended
December 31,

 
    

         2022

    

         2021 

    

         2022

    

         2021

 

 

 

 Net income

  

 

$16,425 

 

  

 

$18,765 

 

  

 

$33,981 

 

  

 

$39,270 

 

  

 

 

    

 

 

    

 

 

    

 

 

 

 Other comprehensive income (loss), net of tax:

           

 Net change related to derivatives

  

 

(32) 

 

  

 

 

  

 

(25) 

 

  

 

 

 Net change related to investments

  

 

348 

 

  

 

(743) 

 

  

 

(1,549) 

 

  

 

(1,165) 

 

 Translation adjustments and other

  

 

570 

 

  

 

(103) 

 

  

 

(205) 

 

  

 

(222) 

 

 

    

 

 

    

 

 

    

 

 

 

 Other comprehensive income (loss)

  

 

886 

 

  

 

(846) 

 

  

 

(1,779) 

 

  

 

(1,385) 

 

 

    

 

 

    

 

 

    

 

 

 

 Comprehensive income

  

 

$17,311 

 

  

 

$17,919 

 

  

 

$32,202 

 

  

 

$37,885 

 

  

 

 

    

 

 

    

 

 

    

 

 

 


BALANCE SHEETS

(In millions) (Unaudited)

 

     December 31,
2022 
     June 30,
2022 
 

 

 

 Assets

     

 Current assets:

     

 Cash and cash equivalents

  

 

$15,646 

 

  

 

$13,931 

 

 Short-term investments

  

 

83,862 

 

  

 

90,826 

 

 

    

 

 

 

 Total cash, cash equivalents, and short-term investments

  

 

99,508 

 

  

 

104,757 

 

 Accounts receivable, net of allowance for doubtful accounts of $485 and $633

  

 

35,833 

 

  

 

44,261 

 

 Inventories

  

 

2,980 

 

  

 

3,742 

 

 Other current assets

  

 

19,502 

 

  

 

16,924 

 

 

    

 

 

 

 Total current assets

  

 

157,823 

 

  

 

169,684 

 

 Property and equipment, net of accumulated depreciation of $63,459 and $59,660

  

 

82,755 

 

  

 

74,398 

 

 Operating lease right-of-use assets

  

 

13,624 

 

  

 

13,148 

 

 Equity investments

  

 

7,097 

 

  

 

6,891 

 

 Goodwill

  

 

67,905 

 

  

 

67,524 

 

 Intangible assets, net

  

 

10,354 

 

  

 

11,298 

 

 Other long-term assets

  

 

24,994 

 

  

 

21,897 

 

 

    

 

 

 

 Total assets

  

 

$364,552 

 

  

 

$364,840 

 

  

 

 

    

 

 

 

 Liabilities and stockholders’ equity

     

 Current liabilities:

     

 Accounts payable

  

 

$15,354 

 

  

 

$19,000 

 

 Current portion of long-term debt

  

 

3,997 

 

  

 

2,749 

 

 Accrued compensation

  

 

9,030 

 

  

 

10,661 

 

 Short-term income taxes

  

 

3,553 

 

  

 

4,067 

 

 Short-term unearned revenue

  

 

36,982 

 

  

 

45,538 

 

 Other current liabilities

  

 

12,802 

 

  

 

13,067 

 

 

    

 

 

 

 Total current liabilities

  

 

81,718 

 

  

 

95,082 

 

 Long-term debt

  

 

44,119 

 

  

 

47,032 

 

 Long-term income taxes

  

 

24,169 

 

  

 

26,069 

 

 Long-term unearned revenue

  

 

2,644 

 

  

 

2,870 

 

 Deferred income taxes

  

 

289 

 

  

 

230 

 

 Operating lease liabilities

  

 

11,998 

 

  

 

11,489 

 

 Other long-term liabilities

  

 

16,479 

 

  

 

15,526 

 

 

    

 

 

 

 Total liabilities

  

 

181,416 

 

  

 

198,298 

 

 

    

 

 

 

 Commitments and contingencies

     

 Stockholders’ equity:

     

 Common stock and paid-in capital—shares authorized 24,000; outstanding 7,447 and 7,464

  

 

90,225 

 

  

 

86,939 

 

 Retained earnings

  

 

99,368 

 

  

 

84,281 

 

 Accumulated other comprehensive loss

  

 

(6,457) 

 

  

 

(4,678) 

 

 

    

 

 

 

 Total stockholders’ equity 

  

 

183,136 

 

  

 

166,542 

 

 

    

 

 

 

 Total liabilities and stockholders’ equity

  

 

            $364,552 

 

  

 

            $364,840 

 

  

 

 

    

 

 

 


CASH FLOWS STATEMENTS

(In millions) (Unaudited)

 

     Three Months Ended 
December 31, 
     Six Months Ended 
December 31, 
 
                 2022                  2021                  2022                  2021   

 

 

 Operations

                             

 Net income

     $16,425         $18,765         $33,981         $39,270   

 Adjustments to reconcile net income to net cash from operations:

                                   

 Depreciation, amortization, and other

     3,648         3,496         6,438         6,708   

 Stock-based compensation expense

     2,538         1,897         4,730         3,599   

 Net recognized losses (gains) on investments and derivatives

     214         (307)         192         (671)   

 Deferred income taxes

     (1,305)         183         (2,496)         (5,787)   

 Changes in operating assets and liabilities:

                                   

 Accounts receivable

     (3,164)         (5,543)         8,565         4,943   

 Inventories

     1,305         394         762         (383)   

 Other current assets

     (392)         830         (724)         1,770   

 Other long-term assets

     (65)         (908)        (731)         (1,506)   

 Accounts payable

     (2,058)         235         (3,625)         (236)   

 Unearned revenue

     (5,186)         (4,343)         (8,508)         (7,228)   

 Income taxes

     (2,863)         (2,057)         (2,453)         596   

 Other current liabilities

     1,819         1,745         (2,205)         (2,398)   

 Other long-term liabilities

     257         93         445         343   

 

    

 

 

    

 

 

    

 

 

 

 Net cash from operations

     11,173         14,480         34,371         39,020   

 

    

 

 

    

 

 

    

 

 

 

 Financing

                                   

 Repayments of debt

     (750)                (1,750)         (4,826)   

 Common stock issued

     243         291         818         903   

 Common stock repurchased

     (5,459)         (7,433)         (11,032)         (15,117)   

 Common stock cash dividends paid

     (5,066)         (4,652)         (9,687)         (8,858)   

 Other, net

     (317)         (192)         (581)         (364)   

 

    

 

 

    

 

 

    

 

 

 

 Net cash used in financing

     (11,349)         (11,986)         (22,232)         (28,262)   

 

    

 

 

    

 

 

    

 

 

 

 Investing

                                   

 Additions to property and equipment

     (6,274)         (5,865)         (12,557)         (11,675)   

 Acquisition of companies, net of cash acquired, and purchases of intangible and other assets

     (679)         (850)         (1,028)         (2,056)   

 Purchases of investments

     (11,599)         (2,505)         (16,612)         (12,814)   

 Maturities of investments

     6,928         5,253         13,590         14,115   

 Sales of investments

     4,775         2,895         7,486         8,525   

 Other, net

     (301)         (89)         (1,161)         (506)   

 

    

 

 

    

 

 

    

 

 

 

 Net cash used in investing

     (7,150)         (1,161)         (10,282)         (4,411)   

 

    

 

 

    

 

 

    

 

 

 

 Effect of foreign exchange rates on cash and cash equivalents

     88         106         (142)         33   

 

    

 

 

    

 

 

    

 

 

 

 Net change in cash and cash equivalents

     (7,238)         1,439         1,715         6,380   

 Cash and cash equivalents, beginning of period

     22,884         19,165         13,931         14,224   

 

    

 

 

    

 

 

    

 

 

 

 Cash and cash equivalents, end of period

     $15,646         $20,604         $15,646         $20,604   
  

 

 

    

 

 

    

 

 

    

 

 

 


SEGMENT REVENUE AND OPERATING INCOME

(In millions) (Unaudited)

 

     Three Months Ended 
December 31, 
     Six Months Ended 
December 31, 
 
     2022      2021       2022      2021   

 

 

 Revenue

           

 Productivity and Business Processes

     $17,002         $15,936         $33,467         $30,975   

 Intelligent Cloud

     21,508         18,262         41,833         35,174   

 More Personal Computing

     14,237         17,530         27,569         30,896   

 

    

 

 

    

 

 

    

 

 

 

 Total

     $52,747         $51,728         $102,869         $97,045   
  

 

 

    

 

 

    

 

 

    

 

 

 

 Operating Income

           

 Productivity and Business Processes

     $8,175         $7,688         $16,498         $15,269   

 Intelligent Cloud

     8,904         8,323         17,882         16,004   

 More Personal Computing

     3,320         6,236         7,537         11,212   

 

    

 

 

    

 

 

    

 

 

 

 Total

     $20,399         $22,247         $41,917         $42,485   
  

 

 

    

 

 

    

 

 

    

 

 

 

We have recast certain prior period amounts to conform to the way we internally manage and monitor our business.