We offer an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and we provide solution support and consulting services. 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. The gamer remains at the heart of the Xbox ecosystem. Microsoft said revenue in its "Intelligent Cloud" segment rose 23% to $14.6 billion, with 50% growth in Azure. Derivative instruments are recognized as either assets or liabilities and measured at fair value. In January, we released our first annual sustainability report, sharing our progress toward becoming carbon negative, zero waste, and water positive by 2030. Azure faces diverse competition from companies such as Amazon, Google, IBM, Oracle, VMware, and open source offerings. To serve the needs of customers around the world and to improve the quality and usability of products in international markets, we localize many of our products to reflect local languages and conventions. Our leases have remaining lease terms of 1 year to 15 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The mix of income before income taxes between the U.S. and foreign countries impacted our effective tax rate as a result of the geographic distribution of, and customer demand for, our products and services. The Microsoft Cloud Solution Provider program offers customers an easy way to license the cloud services they need in combination with the value-added services offered by their systems integrator, managed services provider, or cloud reseller partner. We will include as many of your questions as possible during the Q&A session of the meeting and will provide answers to questions on the Microsoft Investor Relations website under the Annual Meeting page. Under the Executive Incentive Plan, the Compensation Committee approves stock awards to executive officers and certain senior executives. We are living in the new era of the intelligent cloud and intelligent edge, which is being sharpened by rapid advances in distributed computing, ambient intelligence, and multidevice experiences. However, just like how . Xbox is designed to benefit users by providing access to a network of certified applications and services and to benefit our developer and partner ecosystems by providing access to a large customer base. 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. These forward-looking statements generally are identified by the words believe, project, expect, anticipate, estimate, intend, strategy, future, opportunity, plan, may, should, will, would, will be, will continue, will likely result, and similar expressions. Nearly all computer manufacturers offer server hardware for the Linux operating system and many contribute to Linux operating system development. Accumulated Other Comprehensive Income (Loss), New integrations between Dynamics 365 and Teams, pending acquisition of Nuance Communications, we will invest $20 billion over the next five years, our acquisition this year of ZeniMax Media, 25 million people connect to the digital skills for in-demand roles, Racial Equity Initiative: Strengthening Our Communities report, humanitarian action and emergency response, http://www.microsoft.com/investor/AnnualReports/default.aspx, Adjusted diluted earnings per share (non-GAAP), Net gains (losses) on foreign currency remeasurements, Net income tax benefit related to India Supreme Court decision on withholding taxes, Operating leases, including imputed interest, Finance leases, including imputed interest, 100 basis point increase in U.S. treasury interest rates, 100 basis point increase in credit spreads. We have paid transition tax of $4.7 billion, which included $1.5 billion for fiscal year 2021. These efforts include increasing our representation and strengthening our culture of inclusion by doubling the number of Black and African American people managers, senior individual contributors, and senior leaders in the United States by 2025; evolving our ecosystem with our supply chain, banking partners, and partner ecosystem; and strengthening our communities by using data, technology, and partnerships to help address racial injustice and inequities of the Black and African American communities in the U.S. and improve the safety and wellbeing of our employees and their communities. Among Microsoft Corporation, the S&P 500 Index and the NASDAQ Computer Index. The remaining transition tax of $13.6 billion is payable over the next five years with a final payment in fiscal year 2026. Open agreements are a simple, cost-effective way to acquire the latest Microsoft technology. In its 2022 financial year, Microsoft generated 63.4 billion U.S. dollars from its productivity and business processes segment and a further 75.3 billion . Windows, including Windows OEM licensing (Windows OEM) and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows IoT; and MSN advertising. Gross margin increased $6.5 billion or 18% driven by growth in Office 365 Commercial and LinkedIn, and the change in estimated useful lives of our server and network equipment. Intercompany transactions and balances have been eliminated. Microsoft Corporation will be reporting its Q2 results after market close tomorrow, 1/24. Price as of February 28, 2023, 12:39 p.m. Azures competitive advantage includes enabling a hybrid cloud, allowing deployment of existing datacenters with our public cloud into a single, cohesive infrastructure, and the ability to run at a scale that meets the needs of businesses of all sizes and complexities. Total. Access to this and all other statistics on 80,000 topics from, Show sources information 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. Beyond our products, our operational security posture and threat intelligence help customers defend themselves. In January 2020, we announced a bold commitment and detailed plan to be carbon negative by 2030, and to remove from the environment by 2050 all the carbon we have emitted since our founding in 1975. We issue debt to take advantage of favorable pricing and liquidity in the debt markets, reflecting our credit rating and the low interest rate environment. Microsoft. Following are the details of the purchase price allocated to the intangible assets acquired: Transactions recognized separately from the purchase price allocation were approximately $600 million, primarily related to equity awards recognized as expense over the related service period. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit and are generally allocated based on relative gross margin. With Azure Arc, customers can deploy Azure data services on-premises, at the edge, or in multicloud environments. Organizations purchase perpetual licenses or subscribe to licenses. $59.66B. Chairman and Chief Executive Officer Through our Democracy Forward Program, were working across sectors to safeguard electoral processes and defend against disinformation. Adjustments to reconcile net income to net cash from operations: Net recognized gains on investments and derivatives. The pattern of delivery (i.e., timing of when revenue is recognized) for each distinct performance obligation. 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. We believe our allowances for income tax contingencies are adequate. 12.80%. LinkedIn has over 750 million members and has offices around the globe. Sales and marketing expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with sales and marketing personnel, and the costs of advertising, promotions, trade shows, seminars, and other programs. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America. We hire a mix of university and industry talent worldwide. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. As part of our effort to promote a One Microsoft and inclusive culture, we expanded stock eligibility to all Microsoft employees as part of our annual rewards process. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Our future opportunity depends on reaching and empowering all communities, and we are committed to taking action to help address racial injustice and inequity. We believe our clouds global scale, coupled with our broad portfolio of identity and security solutions, allows us to effectively solve complex cybersecurity challenges for our customers and differentiates us from the competition. Every organization is looking to digitize their end-to-end operationsfrom sales and customer service to supply chain managementso they can rapidly adapt to changing market dynamics. Many organizations that license our products and services transact directly with us through Enterprise Agreements and Enterprise Services contracts, with sales support from system integrators, independent software vendors, web agencies, and partners that advise organizations on licensing our products and services (Enterprise Agreement Software Advisors or ESA). Information on our business strategies, financial results, and metrics for investors. Vice Chairman and Executive Vice The company's Xbox Game Pass gaming subscription revenue during the year was . Refer to Note 16 Stockholders Equity of the Notes to Financial Statements for further discussion. It transforms how people connect holographically with others in a natural way. Our skills initiative brings together learning resources, certification opportunities, and job-seeker tools from LinkedIn, GitHub, and Microsoft Learn, and is built on data insights drawn from LinkedIns Economic Graph. 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