MSFT Q1 2022 Earnings

Microsoft Q1 2022 Earnings

Summary

• Revenue : 45.3B up 22%
• Operating Income : 20.2B up 27%
• Net Income : 20.5B up 48%

Segment Breakdown

Productivity and Business Processes (15B up 22%)

• Office commercial products and cloud services up 18% 
• Office 365 revenue up 23%
•  Office consumer products and cloud services up 10% 
• Linkedin revenue up 42% and marketing solutions up 66%
• Dynamic products and cloud services up 31% and Dynamics 365 up 48%

Intelligent Cloud (17B up 31%)

• Server products up 35%
• Azure up 50%

Personal Computing (13.3B up 12%)

• Windows OEM revenue increased 10%
• Windows commercial products and cloud services up 12%
• XBOX content and services revenue decreased 2%
• Search advertising revenue up 40%
• Surface revenue decreased 17%

Subscriptions

• Microsoft consumers subscribers up 54.1MN
• 78% of fortune 500 use MSFT Hybrid offerings

• 84% of the Fortune 100 use GitHub

• GitHub is now home to 73 million developers up 2 times since our acquisition three years ago.

• 15,000 enterprise customers of LinkedIn Learning

• Linkedin has 800M members

• Hundred and thirty-eight organizations now have more than 100,000 users of Teams and more than 3,000 have more than 10,000 users.

• 650,000 customers using our security solutions, up 50% year over year

Customers

• Over 75% of the Fortune 500 use MSFT hybrid offerings
• And with Azure Arc, customers like Nokia, Royal Bank of Canada, and SKF can deploy and run applications at the edge or in multicloud environments. Organizations also prefer our cloud to power the mission-critical apps they rely on every day. GE Healthcare and Procter and Gamble migrated critical workloads to Azure this quarter. And leading companies in every industry including Bertelsmann, Kimberly Clark, The NBA, SoftBank, ThyssenKrupp all chose Azure for their SAP workloads. 
• Data

• The leading indicator of digital transformation success in an organization is organization's ability to turn data into analytical and predictive bar. Azure Synapse bring together -- brings together data integration, enterprise data warehousing, and big data analytics into a comprehensive solution. With Synapse Link for Dataverse, organizations can analyze data from business applications like Power Platform and Dynamics 365 with just a few clicks. With Synapse Link for Cosmos DB, they can run real-time no ETL analytics over their operational data. And with Power BI, anyone in the organization can access these insights. Thousands of active Power BI customers are using Synapse today.

• Developers

• More and more businesses are choosing GitHub Enterprise to provide their developer teams the most advanced platform to build, ship, and maintain software. This quarter alone, we introduced more than 70 enterprise features, 84% of the Fortune 100 use GitHub, and we are seeing growing usage from digital-native companies and the world's most established firms, from Pinterest to Procter and Gamble, from Stripe to Societe Generale. We are rapidly innovating in AI and our large-scale models are powering everything, from meeting recaps in Teams to helping developers code in GitHub to the next best action in Dynamics 365. And as machine learning continues to mature, managing the life cycle of models or MLOps has become more prevalent, and Azure ML is now the go-to tool for data science teams. And large organizations from Ecolab to Providence Health Care are relying on Azure AI to better meet customer needs.

Number of LinkedIn users:

2021: 800 million

2020: 675 million

2019: 645 million

2018: 550 million

2017: 500 million

2016: 450 million

2015: 400 million

2014: 300 million

2013: 200 million

2011:  100 million

2009:  50 million

2007:  10 million

2004:  500,000

2003:    launch

Shareholders

 

Google Q3 2021 Earnings

Google Q3 2021 Earnings

Numbers

• Revenue: $65.1B vs $46B in Q3, 2020
• EPS: $28 vs 16.4 in Q3, 2020
• Operating Income: $21B vs 11.2B in Q3, 2020
• Net Income - 18.9B vs 11.2B in Q3, 2020
• Operating margin - 32% vs 24% in Q3, 2020

Segment Breakdown

• Google search 37.9B vs 26.338B in Q3, 2020 up 43%
• Google Cloud revenue: $4.99 billion vs. 3.44B in Q3 2020 up 45%
• YouTube ads: $7.2 billion vs. $5.03 billion in Q3 2020 up 23%
• Traffic Acquisition Costs (TAC): $11.5B billion  vs. $8.1B
• Google Network 7.9B vs 5.7B in Q3, 2020 up 38.5%
• Google Other(hardware, playstore, non-advertising youtube revenues) 6.7B (5.4B in Q3 2020) up 24%

Operating Income breakdown

• Google Service - 23.9B
• Cloud lost 644M in Q3. Prediction is that in 2021 Cloud will be cash flow positive
• Other bets lost 1.2B
• Google ends the quarter with 142B in cash

Highlights and Opinions from earnings call

• Retail

• We've seen explosive growth in digital over the last 20-some months. But as the world begins to reopen, shoppers are returning to stores. Brick-and-mortar isn't dead. Instead, omnichannel is in full force. Searches for open now near me are up 4 times globally versus last year. Strong growth in local shopping queries means people are researching their visits to stores more often before they go. As a result, we've seen more advertisers include in-store sales alongside e-commerce goals to drive omnichannel growth. Adoption has nearly doubled over the past year.

• Youtube 
• We recently surpassed 50 million music and premium subscribers, including those in trial, and YouTube Shorts continues to see higher adoption rates. In the past year, the average number of daily first-time creators more than doubled.

• Over 2 million creators are now making money and building their businesses on YouTube via YouTube partner program with 10 different ways to monetize their content from Super Chat to BrandConnect. The next generation of businesses and media companies are being built by creators on YouTube and we're excited to help them grow.

• Other revenues : Google play > Youtube > Hardware
• Signing multi-year multi-product partnerships through Cloud
• Univision, T-Mobile
• Very strong customer momentum in data cloud - Twitter
• AI/ML - Financial services, fraud and risk - HSBC
• Bigquery - business intelligence cloud
• Operational efficiency - migrating data center to Google Cloud
• Google workspace - nurses and retail store workers
• Waymo

• Waymo began welcoming riders to its trusted tester program in San Francisco, in addition to its fully autonomous Ride-Hailing Service currently in Phoenix. Next year, Waymo will open a dedicated trucking hub in the Dallas-Fort Worth area, helping support commercial freight routes across the Southwest. And we announced last week the first commercial expansion of Fink's on-demand air delivery service to Walgreens customers in select locations.

• 150 million people across 40 countries are now using Google Pay to manage transactions and stay on top of their finances. 

Apple Q3 2021

 Summary

• Revenue up 36% percent to new Q3 quarter record - $81.4 B
  
• Product Revenue up 37% percent to new Q3 quarter record - $63.9 B
  
• Services gross margin was 69.8% and product gross margin was 36% and company gross margin was 43.3%
• Net income of $21.7 billion, diluted earnings per share of $1.30 and operating cash flow of $21.1 billion
  
• iPhone revenue was 39.6B growing 50% yoy

• $17.5 billion with all-time records for cloud services, music, video, advertising, and payment services and June quarter records for the App Store and AppleCare.

• Apple trends

• First, our installed base of devices reached an all-time high across each geographic segment. 

• Second, the number of both transacting and paid accounts on our digital content stores reached a new all-time high during the June quarter in each geographic segment, and paid accounts increased double digits.

• Third, paid subscriptions continue to show strong growth. We now have more than 700 million paid subscriptions across the services on our platform, which is up more than 150 million from last year and nearly four times the number of paid subscriptions we had only four years ago. 

• And finally, we're adding new services that we think our customers will love while also continuing to improve the breadth and quality of our current services offerings.

• Wearables, home, and accessories grew 36% year over year to $8.8 billion, setting new June quarter revenue records in every geographic segment. We continue to improve and expand our product offerings in this category. This quarter, we began shipping our new Apple TV 4K with a redesigned Siri Remote and our brand-new AirTags, and the customer response to both products has been very strong. In addition to its outstanding sales performance globally, Apple Watch continues to extend its reach, with nearly 75% of the customers purchasing Apple Watch during the quarter being new to the product.

• For Mac, despite supply constraints, we set a June quarter record of $8.2 billion, up 16% over last year, with June quarter revenue records in most markets we track around the world. It is remarkable that the last four quarters for Mac have been its best four quarters ever. This exceptional level of sales success has been driven by the very enthusiastic customer response to our new Macs powered by the M1 chip, which we most recently brought to our newly redesigned iMac. iPad performance was also strong with revenue of $7.4 billion, up 12% in spite of significant supply constraints.

• During the quarter, we also starting shipping our new iPad Pro powered by the M1 chip, and customer response has been outstanding. Both iPad and Mac have taken computing to the next level, and when you combine their performance over the last 12 months, they are now the size of a Fortune 50 business thanks to the best product lineups we've ever had, very high levels of customer satisfaction and a loyal growing installed base. In fact, around half of the customers purchasing Mac and iPad during the quarter were new to that product, and in most recent surveys of U.S. consumers from 451 Research, customer satisfaction was 92% for Mac and 95% for iPad.

• In enterprise, our customers are excited about the superior performance, battery life, and security that the new M1 Macs bring. MassMutual, for example, is offering M1 MacBook Pro to all of its employees and equipping all conference rooms with M1 Mac Minis in preparation for return to work. And with its incredible performance and affordable entry price, the MacBook Air with M1 is gaining rapid adoption among many leading enterprise organizations. Italgas, Italy's largest natural gas company, which will soon be using its extensive network to distribute renewable gases, is replacing every employee's Windows laptop with the new MacBook Air powered by Apple's M1 chip to bring the latest technology to its workforce.

  And Grab, Southeast Asia's leading super app that provides transportation, food delivery and digital payment services, is adding M1 MacBook Air to its companywide M1 Mac deployment. Let me now turn to our cash position. 

• Net cash was 72 billion at the end of the quarter.
  

• We're not predicting the next cycle, but I would point out a few things. One is we have a very large and growing installed base. As you know, we've -- the iPhones passed a billion active devices earlier this year.

  Two, we have loyal and satisfied customers. The customer set that we're seeing on the new iPhones are -- is just amazing. It's jaw-dropping. And the geographic response is pervasive across the world.

  And in the U.S., we had the top three selling models. In the U.K., we have four out of the top five. In Australia, we have the top two. In Japan, we have the top three.

• In Urban China, we have the top two. And so the response from customers all around have been great. Obviously, the product itself is amazing. The 12 lineup was a huge leap that introduced 5G and had A14 Bionic and a number of other fantastic features that customers love.

• The next thing I think to consider is that we're in the very early innings of 5G. If you look at 5G penetration around the world, there's only a couple of countries that are in the double-digits yet. And so that's an amazing thing nine months or so into this. And the last thing is we're going to continue to deliver great products.

Category Breakdown

• iPhone - 38.8 B vs 26.4 B in Q3, 2021
• Mac - 9.1 B vs 9.0 B in Q3, 2021 (up 2%)
• iPad - 8.2 B vs 6.7 B in Q3, 2021 (up 81%)
• Wearbales - 8.7 B vs 7.8 B in Q3, 2021 (up 25%)
• Services - 18.2 B vs 14.5 B in Q3, 2021 (up 27%)
• Revenue - 83.3 B in Q3, 2021 (up 50%)
• Net income - 20.5 B 

Geography Breakdown

• Americas 36.8 B vs 30.6 B in Q1, 2020
• Europe 20.7 B vs 16.9 B in Q1, 2020
• China 14.5 B vs 7.9 B in Q3, 2020
• Japan 5.9 B vs 5.0 B in Q3, 2020
• APAC 5.1 B vs 4.1 B in Q3, 2020

Apple Revenue (Billions)

2021(est): 365

2020: 294

2019: 268

2018: 266

2017: 229

2016: 216

2015: 234

2014: 183

2013: 171

2012: 157

2011: 108

2010: 65

2009: 43

2008: 37

2007: 25

2006: 19

2005: 14

2004: 8.3

2003: 6.2

2002: 5.7

2001: 5.4

2000: 8.0

1999: 6.1

1998: 5.9

1997: 7.1