Last week, Microsoft announced its first quarter of fiscal 2018 fiscal year earnings. Not surprisingly, Microsoft made a fortune in this quarter. After Microsoft reported its earnings, its share price soared on Friday after the stock market opened, closing at a price of $ 83.8 per share, an increase of 6.28%.
Throughout Microsoft's financial situation, have to say, was founded in 1975, now 40-year-old Microsoft really is the technology industry's chiefs, although Apple and Google come from behind, but not again the wave of Microsoft eliminated, but to this The company added an element of innovation.
Stable play science and technology bigwigs
About 30 years ago (March 13, 1986), Microsoft went public on the NASDAQ, Microsoft jumped to $ 502 million in market value, and millions and millions of millionaires were born.
Windows and Office have brought sustained revenue to Microsoft, but missed the mobile era, trying to market through the development of Windows Phone and Nokia to get a piece of cake and not. Microsoft on the "cloud", started too late, but fortunately Microsoft's reputation, service is not bad, Azure turnover growth rate is also rising.
In artificial intelligence, Microsoft is not far behind, looking for the depth of artificial intelligence, one of the three great ancestors of Yoshua Bengio to do artificial intelligence research consultant. Microsoft helped demonstrate some of its AI skills with language assistants Cortna and Microsoft Small Ice. In the next few years, Microsoft will still be a leader in science and technology.
Why do you say that? Take a look at this quarter's earnings.
According to Microsoft's official financial statement (FinancialStatementFY2018Q1) 2018 fiscal year, Microsoft's revenue this quarter, 24.5 billion US dollars, an increase of 11%, gross profit of 162.6 US dollars, gross margin was 66% over the previous fiscal Year higher than 2%. This quarter. Microsoft's net profit of 65.76 billion US dollars, an increase of 14%.
According to earnings data, Lei Feng network found that Microsoft in the performance of the last three financial years are quite stable. In the second quarter of each fiscal year, its revenue showed a quarter-on-quarter increase and the annual change tended to be flat.
From a net profit point of view, Microsoft made a loss in the fourth quarter of FY2015. However, the reason for this quarter's loss was mainly due to the inclusion of related non-cash impairment charges related to the acquisition of Nokia equipment and service businesses and Microsoft's reorganization Consolidate expenses.
However, Microsoft and therefore greatly affected, in the next quarter, its gross margin remained above 60%.
In the first quarter of fiscal year 2018 fiscal year Microsoft announced, for Microsoft, Merrill Lynch investment rating:
Although Microsoft is now facing a PC-based micro-Amazon, the case of the dominant cloud industry, Microsoft is still able to stabilize the performance of Windows, cloud services to achieve increasing growth. Microsoft maintained this evergreen business with its cloud-based Office. In addition, Microsoft will target a larger potential market area (TAM Total Addressable Market). The next three years, Microsoft's current trend of better business will continue to grow.
Take a look at Microsoft's revenue and operating profit for each business segment.
Microsoft has three business units that make money: productivity and business processes, smart clouds, and more personal computing.
Productivity and business processes include commercial and personal versions of Office, Skype, LinkedIn and ERP, CRM systems and more.
Smart Cloud includes public, private and hybrid server products and cloud services, as well as enterprise consulting services. Microsoft SQL Server, Windows Server, Visual Studio, Azure, etc. fall into this category.
More personal computing for personal end-users, developers and IT professionals. Including Windows systems, Windows cloud services, hardware devices such as Microsoft Surface, PC games, including Xbox hardware and software and services, search engine (bing) advertising services.
Lei Feng network according to earnings data produced a variety of business revenue and operating profit line chart.
From the revenue point of view, the three major business performance are considered stable. From the operating profit point of view, productivity and business processes are Microsoft's Evergreen business, but there is a slight downward trend. And more individuals even though the business is a slight upward trend, smart cloud performance is stable.
According to the Microsoft earnings conference, the first quarter of 2018, Microsoft's productivity and business processes revenue reached 8.238 billion US dollars, an increase of 28 percentage points. Operating profit increased by 3%. Office Business revenue increased 42% from a year earlier, while Office Personal revenue grew 12%. It can be said that Office has been a major contributor to Microsoft's revenue. Microsoft Dynamics revenue increased 13%. LinkedIn's revenue for the quarter was $ 1.1 billion. In the quarter, LinkedIn created a 5% revenue and gross margin for Microsoft, but also pulled operating profit by 4%. Microsoft believes LinkedIn can generate shareholder benefits in FY 2018.
Smart cloud business in the quarter brought Microsoft 6.9 billion US dollars revenue, an increase of 14%. Among them, server products and cloud services increased by 17% over the same period of last year. Azure business increased by 90% compared with the same period of last year.
More personal computing business hit a record high of $ 9.378 billion in this quarter, excluding the handset business, up 3% on a year-on-year basis. Commercial and personal computers, which bring a 4% profit to traditional equipment manufacturing (OEM) departments. Surface business revenue grew by 12%. Microsoft's games business revenue increased only 1%, of which the game software and services revenue increased 21%, but unfortunately the loss of hardware offset most of the game revenue.
Software big brother's new growth point
On June 13, 2016, Microsoft announced its acquisition of LinkedIn, a global professional social networking site, for $ 262. On December 8, 2016, Microsoft completed its acquisition of LinkedIn. For this transaction, plus some optimistic, while others are worried that Microsoft will repeat the mistakes made in the acquisition of Nokia. And Microsoft CEO Satya Nadella said: "This transaction will be the world's leading professional cloud and the world's leading professional network together" and said the acquisition can boost the LinkedIn and Microsoft Office365, Dynamics services increase.
According to data released by Microsoft, after the acquisition of LinkedIn by Microsoft, LinkedIn's revenue is on the rise, and the operating loss also shows a downward trend. And except for amortization of intangible assets, LinkedIn's operating profit would have 78 million US dollars. At present, there are more than 530 million people who use LinkedIn, and Microsoft believes that it is not blindly optimistic that LinkedIn should pay dividends to shareholders in 2018.
Back in 2010, Microsoft's former CEO, Ballmer, announced that it wanted "All In" clouds and invested $ 8.7 billion in research and development. Later, Microsoft's former CEO Satya Ballmer asked Satya to lead the STB department, laying the foundation for Microsoft's cloud business. According to a report Synergy released on October 27, Microsoft's cloud services market share follows AWS, whose annual growth rate (90%) is much higher than that of AWS (about 40%).
Microsoft also made some preparations for AI on cloud services. Microsoft provides enterprises with Azure Machine Learning Studio to build simple machine learning models and "Cognitive Services" (Cognitive Services) that provide businesses with the tools to build their own AI applications. Azure's security mechanism is based on AI. Microsoft Cloud Services is also attracting some gaming companies, and Azure is used by Pub-G, the developer and publisher of the popular game "Jedi Survivor: The Big Escape."
Get up, let go
Of course, floating in the rivers and lakes of science and technology, Microsoft also suffered several times the knife.
Microsoft, powered by the operating system, has had several failures on the operating system. Although Microsoft took 5 years to successfully develop Windows Vista, this feature-rich, clean interface operating system did not get the user's favor, coupled with the hardware is not in place, and other issues, but has been criticized. April 10, 2012, Microsoft terminated the mainstream technical support for Windows Vista, April 11 this year, Microsoft officially terminated all its technical support.
Microsoft is the latest giant on the move. In November 2011, Microsoft and Nokia launched Lumia. On September 3, 2013, Microsoft announced that it has acquired Nokia's mobile phone business at Sunset Xishan for 72 U.S. dollars. April 25, 2014, the transaction was completed, however, Nokia did not give Microsoft the advantage of moving. Windows Phone operating system can not survive iOS and Android dominated mobile operating system. In May 2016, Microsoft sold the Nokia handset business to Foxconn for 350 million U.S. dollars.
According to IDC data in April this year, Windows mobile operating system, the global market share of only 0.03%. Microsoft executives also said they will not continue to focus on the development of Windows 10 Mobile. In this quarter's earnings conference, Microsoft said it ended mobile phone business in November last year, the first quarter of 2018 is also the last quarter by mobile phones. Microsoft is completely farewell to the phone.
In addition to mobile phones, Microsoft has some commercial mistakes in the game hardware. As mentioned earlier,Microsoft is losing money on the game hardware. Last week, Alex Kipman, founder of Kinect, told Co.Design in an interview that Microsoft will discontinue Kinect. Designed as an Xbox 360, Kinect tracks the user's whole body motion and technically it's a great product. However, the price is high, affecting the overall device performance is its flawed, Microsoft also had to stop in time.
Lei Feng Network Summary: Although Microsoft has made some mistakes in some business decisions, but good to get affordable, but also let go. In a time and practice also learned to advance with the times, go along the line. This is undoubtedly a huge company is commendable. It has its own irreplaceable product that has accumulated along the way, as well as new products that open up the future, and less and less like a software company. Never mind the year Microsoft, has a confident internal force, stable performance, is the best proof of this internal forces.