Income Statement
The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.
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- Cash Flow Statement
- Common-Size Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Microsoft Corp., consolidated income statement
US$ in millions
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
- Revenue Trends
- Total revenue demonstrated a consistent upward trend from 2019 through 2024, increasing from approximately $125.8 billion to $245.1 billion. Product revenue showed modest fluctuations, rising steadily until 2022 before declining in 2023 and stabilizing somewhat in 2024. Service and other revenue grew significantly each year, nearly tripling over the period, indicating a shifting revenue composition towards services.
- Cost of Revenue and Gross Margin
- Cost of revenue increased steadily from $42.9 billion in 2019 to $74.1 billion in 2024. The increase in costs aligns with the growth in revenue. Despite this rise, gross margin expanded from about $82.9 billion to $171 billion, reflecting improved profitability and likely operational efficiencies or premium pricing strategies.
- Operating Expenses
- Research and development expenses rose consistently year over year, reaching $29.5 billion by 2024, demonstrating a commitment to innovation and product development. Sales and marketing expenses also increased steadily, though at a slower pace than R&D, suggesting ongoing investment in market expansion and customer acquisition. General and administrative costs showed a moderate increase, with a notable jump between 2021 and 2023, potentially reflecting organizational growth or increased administrative overhead.
- Profitability
- Operating income grew substantially from $42.9 billion in 2019 to $109.4 billion in 2024, highlighting strong operational performance and effective cost management. Net income followed a similar upward trajectory, increasing from $39.2 billion to $88.1 billion over the period, although there was a slight dip in 2023. The provision for income taxes increased significantly, which correlates with higher profitability.
- Other Income and Expenses
- Interest and dividends income remained relatively stable, with a slight increase towards 2024. Interest expense decreased gradually over the first five years but saw an uptick in 2024. Net gains and losses on investments and derivatives exhibited variability, with some negative impacts noted in the later years. Other income (expense), net showed considerable volatility, with a notable negative swing in 2024, which may require further investigation.
- Overall Financial Insights
- The data indicates robust revenue growth driven primarily by expanding service offerings, accompanied by disciplined cost control resulting in strong margin improvement. Increasing R&D and marketing investments suggest strategic emphasis on innovation and market presence. Profitability metrics indicate sustained growth, although fluctuations in other income components highlight some exposure to market and operational risks. The increase in tax provisions aligns with higher earnings, impacting net income trends. The slight decline in product revenue and growth in service segments may reflect a successful strategic pivot towards more recurring revenue streams.