Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Microsoft Corp., EBITDA calculation
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).
The annual financial data reveals a consistent and robust upward trend in profitability metrics over the examined periods.
- Net Income
- Net income shows a steady increase from 39,240 million US dollars in June 2019 to 88,136 million US dollars in June 2024. This nearly doubles the net income over five years, indicating strong growth in the company's profitability.
- Earnings Before Tax (EBT)
- EBT follows a similar upward trajectory, rising from 43,688 million US dollars in June 2019 to 107,787 million US dollars in June 2024. This growth suggests improved operational efficiency and increased profit generation before tax considerations.
- Earnings Before Interest and Tax (EBIT)
- EBIT also exhibits a steady increase, moving from 46,374 million US dollars in June 2019 to 110,722 million US dollars in June 2024. This reflects the company's expanding operating profitability, independent of its financing costs.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA demonstrates a significant upward trend, increasing from 58,056 million US dollars in June 2019 to 133,009 million US dollars in June 2024. This growth suggests not only higher operating income but also potentially improved cash flow generation capacity.
Overall, all examined financial metrics show consistent growth year over year, with the most notable increases between 2023 and 2024, indicating accelerating profitability. This pattern suggests the company has been effectively enhancing its operational performance and managing costs to support expanding earnings.
Enterprise Value to EBITDA Ratio, Current
Microsoft Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 3,551,528) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 133,009) |
| Valuation Ratio | |
| EV/EBITDA | 26.70 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | 15.60 |
| Adobe Inc. | 19.91 |
| Cadence Design Systems Inc. | 48.15 |
| CrowdStrike Holdings Inc. | 390.69 |
| International Business Machines Corp. | 24.72 |
| Intuit Inc. | 46.78 |
| Oracle Corp. | 27.44 |
| Palantir Technologies Inc. | 612.33 |
| Palo Alto Networks Inc. | 102.54 |
| Salesforce Inc. | 21.83 |
| ServiceNow Inc. | 84.65 |
| Synopsys Inc. | 37.40 |
| Workday Inc. | 54.33 |
| EV/EBITDA, Sector | |
| Software & Services | 30.09 |
| EV/EBITDA, Industry | |
| Information Technology | 32.39 |
Based on: 10-K (reporting date: 2024-06-30).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Microsoft Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 3,146,813) | 2,410,213) | 2,021,362) | 2,093,369) | 1,487,741) | 999,078) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 133,009) | 105,140) | 100,239) | 85,134) | 68,423) | 58,056) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 23.66 | 22.92 | 20.17 | 24.59 | 21.74 | 17.21 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Accenture PLC | 19.87 | 17.26 | 14.25 | 23.31 | 17.46 | 15.60 | |
| Adobe Inc. | 22.06 | 34.07 | 22.32 | 35.44 | 43.06 | 41.16 | |
| Cadence Design Systems Inc. | 42.25 | 55.61 | 42.11 | 39.61 | 45.75 | — | |
| CrowdStrike Holdings Inc. | 262.20 | — | — | — | — | — | |
| International Business Machines Corp. | 22.90 | 14.41 | 22.17 | 12.53 | 12.28 | — | |
| Intuit Inc. | 38.55 | 38.71 | 36.22 | 51.96 | 35.70 | 34.27 | |
| Oracle Corp. | 21.81 | 21.80 | 17.12 | 13.78 | 11.54 | — | |
| Palantir Technologies Inc. | 551.39 | 175.93 | — | — | — | — | |
| Palo Alto Networks Inc. | 84.17 | 85.08 | 515.19 | — | 349.99 | 117.18 | |
| Salesforce Inc. | 31.64 | 38.31 | 38.88 | 33.83 | 49.45 | — | |
| ServiceNow Inc. | 87.89 | 96.48 | 104.30 | 147.45 | 220.91 | — | |
| Synopsys Inc. | 39.17 | 54.59 | 36.73 | 53.43 | 42.24 | 26.98 | |
| Workday Inc. | 86.37 | 216.44 | 147.90 | 670.04 | — | — | |
| EV/EBITDA, Sector | |||||||
| Software & Services | 27.09 | 25.22 | 22.55 | 25.68 | 23.25 | — | |
| EV/EBITDA, Industry | |||||||
| Information Technology | 27.60 | 23.59 | 18.31 | 20.49 | 19.71 | — | |
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).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 3,146,813 ÷ 133,009 = 23.66
4 Click competitor name to see calculations.
The financial data reflects a dynamic progression in key valuation and profitability metrics over the analyzed periods.
- Enterprise Value (EV)
- The enterprise value consistently increased, rising from approximately 999 billion US dollars in June 2019 to over 3.1 trillion US dollars by June 2024. This represents more than a threefold increase, signaling significant growth in the company's market capitalization and debt profile relative to its cash and cash equivalents.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA demonstrated a steady upward trend across the years, growing from around 58 billion US dollars in June 2019 to approximately 133 billion US dollars by June 2024. This indicates continuous improvement in operational profitability and overall earnings capacity before accounting for non-operational expenses.
- EV/EBITDA Ratio
- The EV/EBITDA ratio exhibited some fluctuations but generally trended upward from 17.21 in June 2019 to 23.66 in June 2024. The ratio peaked at 24.59 in June 2021 and reached a low point at 20.17 in June 2022 before rising again. This pattern indicates varying market valuation multiples relative to earnings, suggesting changing investor sentiment or shifts in growth expectations and risk assessments over time.
Overall, the company experienced robust growth in both valuation and profitability measures, alongside a generally increasing valuation multiple that signifies enhanced market confidence or expectations of future earnings potential.