We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. With more than 60 datacenter regionsincluding 15 new regions added this year on five continentswe are delivering faster access to data and cloud services while addressing critical data residency requirements. ET. We develop most of our products and services internally through the following engineering groups. Yet the fashion and leather goods segment (comprising brands like Fendi and Louis Vuitton) is the major one, generating over 39 billion in . The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards of $4.4 billion, $3.3 billion, and $2.7 billion for fiscal years 2021, 2020, and 2019, respectively. Additional information on our reportable segments is contained in Note 19 Segment Information and Geographic Data of the Notes to Financial Statements. Shares of common stock outstanding were as follows: The following table summarizes the changes in accumulated other comprehensive income (loss) by component: We grant stock-based compensation to employees and directors. Our growth depends on securely delivering continuous innovation and advancing our leading productivity and collaboration tools and services, including Office, Dynamics, and LinkedIn. The plaintiffs have filed supplemental expert evidence, portions of which the defendants have moved to strike. All other shares repurchased were under the share repurchase program approved on September 20, 2016. We are accelerating progress toward a more sustainable future by reducing our environmental footprint, advancing research, helping our customers build sustainable solutions, and advocating for policies that benefit the environment. Microsoft posted a total revenue of $52.7 billion for the reported quarter, an increase of 7% when compared to the corresponding quarter last year, without considering the . Time: 8:30 a.m. Pacific Time Office Consumer products and cloud services revenue increased $474 million or 10% driven by Microsoft 365 Consumer subscription revenue, on a strong prior year comparable that benefited from transactional strength in Japan. Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. These controls include model validation, review of key model inputs, analysis of period-over-period fluctuations, and independent recalculation of prices where appropriate. Continuing . On-the-job stretch and advancement opportunities. Income tax expense includes U.S. and international income taxes, and interest and penalties on uncertain tax positions. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. Microsoft Relationship Sales solution brings together LinkedIn Sales Navigator and Dynamics to transform business to business sales through social selling. Adjusted EBITDA is projected between $380 million and $415 million, down from $453.5 million reported last year. As of June 30, 2021, the primary unresolved issues for the IRS audits relate to transfer pricing, which could have a material impact in our consolidated financial statements when the matters are resolved. Sales Solutions help companies strengthen customer relationships, empower teams with digital selling tools, and acquire new opportunities. Total. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. Activity in the allowance for doubtful accounts was as follows: Allowance for doubtful accounts included in our consolidated balance sheets: We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. With every new generation of Windows, we also unlock the next generation of hardware innovation across our ecosystem. Reinvent productivity and business processes. 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. Date: Tuesday, November 30, 2021 Operating expenses decreased $752 million or 6% driven by prior year charges associated with the closing of our Microsoft Store physical locations and reductions in retail store expenses and marketing, offset in part by investments in Gaming. Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. The defendants filed an interlocutory appeal to the District of Columbia Court of Appeals challenging the standard for evaluating expert scientific evidence. We have a strong position with our large and growing highly engaged community of gamers, including the March 2021 acquisition of ZeniMax Media Inc., the parent company of Bethesda Softworks LLC, one of the largest, privately held game developers and publishers in the world. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period. 1. Debt in the table above is comprised of senior unsecured obligations and ranks equally with our other outstanding obligations. The following table reconciles our financial results reported in accordance with GAAP to non-GAAP financial results: Cash, cash equivalents, and short-term investments totaled $130.3 billion and $136.5 billion as of June 30, 2021 and 2020. Devices, including Surface and PC accessories. Our More Personal Computing segment consists of products and services that put customers at the center of the experience with our technology. We offer integrated, end-to-end capabilities to protect people and organizations. We use metrics in assessing the performance of our business and to make informed decisions regarding the allocation of resources. Compensation cost for stock awards, which include restricted stock units (RSUs) and performance stock units (PSUs), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. A majority of our investments are priced by pricing vendors and are generally Level 1 or Level 2 investments as these vendors either provide a quoted market price in an active market or use observable inputs for their pricing without applying significant adjustments. Enterprise Agreements are designed for medium or large organizations that want to license cloud services and on-premises software organization-wide over a three-year period. Inventories are stated at average cost, subject to the lower of cost or net realizable value. Additions to property and equipment will continue, including new facilities, datacenters, and computer systems for research and development, sales and marketing, support, and administrative staff. Windows OEM revenue increased slightly driven by consumer PC demand, on a strong prior year OEM Pro comparable that benefited from Windows 7 end of support. If you are an admin, please authenticate by logging in again. Their revenue came in at 25,007 Million USD, which missed the expected amount by around 5% but represented a 13% increase YoY. A hearing on general causation is scheduled for January and February of 2022. The ability to convert data into AI drives our competitive advantage. Thats why in April we announced a new five-year commitment to spur the development of accessible technology, expand opportunities for people with disabilities in the workforce, and build a more inclusive workplace. Our revenue fluctuates quarterly and is generally higher in the second and fourth quarters of our fiscal year. Computershare, our transfer agent, can help you with a variety of shareholder related services including: Computershare also administers a direct stock purchase plan and a dividend reinvestment program for the company. Diversity and inclusion continues to be a core priority for every employee at Microsoft and is incorporated into our performance and career development approach. 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. Also included in Other are business dispositions and transfers between segments due to reorganizations, as applicable. We have recast certain prior period amounts to conform to the current period presentation. It transforms how people connect holographically with others in a natural way. As of June 30, 2021, we accrued aggregate legal liabilities of $339 million. Meanwhile, the company is plowing billions of dollars into its Reality Labs (metaverse) segment despite it generating a mere pittance in terms of revenue. Microsoft reported $51.7 billion in revenue for the second fiscal quarter, a 20 percent increase year over year. 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 federal and state net operating loss carryforwards will expire in various years from fiscal 2022 through 2041, if not utilized. In fiscal year 2021, our U.S. income before income taxes was $35.0 billion and our foreign income before income taxes was $36.1 billion. Refer to Note 8 Business Combinations of the Notes to Financial Statements for further discussion. We strive to create local opportunity, growth, and impact in every country around the world. Deloitte & Touche LLP has audited our internal control over financial reporting as of June 30, 2021; their report follows. October 12, 2021. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on the criteria established in Internal Control Integrated Framework (2013) issued by COSO. We evaluated the reasonableness of managements estimates by considering how tax law, including statutes, regulations and case law, impacted managements judgments. (All figures in USD millions, except percentages) The company generates revenue by licensing and supporting an array of software products; offering a diverse portfolio of cloud-based solutions and other services to people and business organizations; designing, manufacturing, and selling devices; and . The rise of hybrid work will be one of the most profound changes to the way people work in more than a century. We made substantial modifications to employee travel policies and implemented office closures so non-essential employees could work remotely. While we employ much of our internally-developed intellectual property exclusively in our products and services, we also engage in outbound licensing of specific patented technologies that are incorporated into licensees products. Financial metrics are calculated based on GAAP results and growth comparisons relate to the corresponding period of last fiscal year. On March 9, 2021, we completed our acquisition of ZeniMax Media Inc. (ZeniMax), the parent company of Bethesda Softworks LLC (Bethesda), for a total purchase price of $8.1 billion, consisting primarily of cash. We may also purchase or license technology that we incorporate into our products and services. Dynamics business solutions, including Dynamics 365, comprising a set of intelligent, cloud-based applications across ERP, CRM, Customer Insights, Power Apps, and Power Automate; and on-premises ERP and CRM applications. Our corporate learning portal has over 100,000 average monthly active users. Xbox revenue is mainly affected by subscriptions and sales of first- and third-party content, as well as advertising. Current Price. And as I write this, we are tracking more than 140 groups that pose an active threat to global cybersecurity. The segment made $ 46. . In 2021, Microsoft's total annual Xbox gaming revenue amounted to 16.28 billion U.S. dollars. Our database, business intelligence, and data warehousing solutions offerings compete with products from IBM, Oracle, SAP, and other companies. We announced in June 2020 that we are expanding access to the digital skills that have become increasingly vital to many of the worlds jobs, and especially to individuals hardest hit by recent job losses. The provision for income taxes for fiscal years 2021, 2020, and 2019 included interest expense related to uncertain tax positions of $274 million, $579 million, and $515 million, respectively, net of income tax benefits. And it underlies our approach to diversity and inclusion. Our customers include individual consumers, small and medium organizations, large global enterprises, public-sector institutions, Internet service providers, application developers, and OEMs. The Google Cloud revenue segment generated 9.3 percent of the company's revenues, up from 4.3 percent in 2018. . Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. Recent Accounting Guidance Not Yet Adopted. 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. And yet, as I reflect on what has been a very challenging year for so manyone that will be forever remembered as a heartbreaking chapter in our historyI find reasons to be hopeful. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. 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