Slide 1: Second Quarter Fiscal Year 2023 Results
£5 Microsoft Second Quarter Fiscal Year 2023 Results Satya Nadella Amy Hood Brett Iversen January 24, 2023
Slide 2: Forward-looking statements
This presentation contains forward-looking statements, which are any predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of fa
Slide 3: Financial Summary and Highlights
Financial Summary and Highlights Quarterly Business Highlights Segment Financial Overview Appendix
Slide 4: FY23 Q2 Financial Summary
FY23 Q2 Financial Summary GAAP and CC Results As Adjusted (non-GAAP) ($ in billions, except per share amounts) FY23 Q2 Growth CC Growth FY23 Q2 Growth* CC Growth** Productivity and Business Processes $17.0 7% 13% $17.0 7% 13% Intelligent Cloud $21.5 18% 24% $21.5 18% 24% More Personal Computing $14.
Slide 5: FY23 Q2 Results vs. Guidance
FY23 Q2 Results vs. Guidance FY23 Q2 (Sin billions, except per share amounts) Guidance Range = Additional FX Additional Adjusted Guidance Non-GAAP Non-GAAP Results vs. Impact Energy Range Results Adjusted Guidance Range Low High Impact Tow High iow High] Productivity and Business Processes $16.60 $1
Slide 6: Quarterly Commercial Highlights
Quarterly Commercial Highlights Investor Metrics FY22 Q2 Commercial bookings growth (y/y) 32% / 37% Commercial remaining performance obligation (in billions) $147 Commercial revenue annuity mix 94% Microsoft Cloud revenue (in billions) $22.2 Microsoft Cloud gross margin percentage 70% Growth rates i
Slide 7: FY23 Q2 Other Financial Highlights
FY23 Q2 Other Financial Highlights + Returned $9.7 billion to shareholders down 11% year-over-year, with $4.6 billion in share repurchases and $5.1 Cash returned to shareholders billion in dividends * Operating expenses were $14.9 billion, up 19% (up 21% CC) year-over-year. Excluding 8 points of imp
Slide 8: FY23 Q2 Business Highlights
FY23 Q2 Business Highlights Productivity é and Business Processes Intelligent Cloud More Personal Computing Office Commercial products and cloud services revenue increased 7% (up 14% CC) driven by Office 365 Commercial revenue growth of 11% (up 18% CC) Office Consumer products and cloud services rev
Slide 9: Productivity and Business Processes
Productivity and Business Processes Overview tte Investor Metrics Office Commercial products and cloud services revenue growth (y/y) Office Consumer products and cloud services revenue growth (y/y) Office 365 Commercial seat growth (y/y) Microsoft 365 Consumer subscribers (in millions) Dynamics prod
Slide 10: Productivity and Business Processes Highlights
ge Productivity and Business Processes ©] dightights Office Commercial * Office Commercial products and cloud services revenue grew 7% (up 14% CC) * Office 365 Commercial revenue grew 11% (up 18% CC) with Office 365 Commercial seat growth of 12%, driven by small and medium business and frontline wor
Slide 11: Intelligent Cloud
Intelligent Cloud = Overview Investor Metrics FY22 Q2 FY22 Q3 FY22 Q4 FY23 Q1 FY23 Q2 Server products and cloud services revenue growth (y/y) 29% 29% / 32% 22% / 26% 22% / 28% 20% / 26% Growth rates include non-GAAP CC growth (GAAP % / CC %). Total Revenue $21.51 + Revenue grew 18% (up 24% CC) drive
Slide 12: Intelligent Cloud Highlights
Intelligent Cloud = Highlights Server Products and Cloud Services Trended Revenue Growth + Server products and cloud services revenue grew 20% (up 26% CC) FY22 Q2 FY22Q3 FY22Q4 FY23Q1_ FY23 Q2 + Azure and other cloud services revenue grew 31% (up 38% CC) driven by strong demand for our consumption-b
Slide 13: More Personal Computing
+») More Personal Computing Overview Investor Metrics FY22 Q2 Windows OEM revenue growth (y/y) 25% Windows Commercial products and cloud services revenue growth (y/y) 13% / 14% Devices revenue growth (y/y) 5% Xbox content and services revenue growth (y/y) 10% Search and news advertising revenue (ex
Slide 14: More Personal Computing Highlights
+2) More Personal Computing Highlights Windows Gaming + Windows OEM revenue declined 39%, including 3 points of negative impact + Gaming revenue declined 13% (down 9% CC) from the prior year Windows 11 revenue deferral, driven by continued PC . + Xbox content and services revenue declined 12% (down
Slide 15: Appendix
Appendix
Slide 16: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Our presentation of second-quarter performance includes non-GAAP financial measures. The following slides provide reconciliations between the GAAP and non- GAAP financial measures presented: + Impact of the Q2 charge * Constant currency reconcil
Slide 17: Impact of the Q2 charge
Impact of the Q2 charge Three Months Ended December 31, . . . Diluted rn Gross Operating Operating Effective Net . ($ in millions, except per share amounts) Revenue . Earnings Margin Expenses Income Tax Rate Income per Share 2021 As Reported (GAAP) $51,728 $34,768 $12,521 $22,247 17% $18,765 $2.48 2
Slide 18: Constant Currency Reconciliation
Constant Currency Reconciliation Three Months Ended December 31, rn Gross Operating Operating Net Diluted ($ in millions, except per share amounts) Revenue . Earnings Margin Expenses Income Income per Share 2021 As Reported (GAAP) $51,728 $34,768 $12,521 $22,247 $18,765 $2.48 2022 As Reported (GAAP)
Slide 19: Constant Currency Reconciliation
Constant Currency Reconciliation Segment Revenue Three Months Ended December 31, (Sin millions) Productivity and Intelligent More Personal Business Processes Cloud Computing 2021 As Reported (GAAP) $15,936 $18,262 $17,530 2022 As Reported (GAAP) $17,002 $21,508 $14,237 Percentage Change Y/Y (GAAP) 7
Slide 20: Constant Currency Reconciliation
Constant Currency Reconciliation Segment Gross Margin Three Months Ended December 31, 2022 Percentage Change Y/Y Percentage Change Y/Y (GAAP) Constant Currency Impact Constant Currency Productivity and Business Processes 8% 8% 16% Intelligent Cloud 17% 6% 23% More Personal Computing (29)% 5% (24)% S
Slide 21: Constant Currency Reconciliation
Constant Currency Reconciliation Three Months Ended December 31, 2022 Selected Product and Service Information Percentage Change Y/Y (GAAP) Constant Currency Impact Percentage ange Commercial bookings 7% (3)% 4% Commercial remaining performance obligation 29% (3)% 26% Microsoft Cloud revenue 22% 7%
Slide 22: Cash Flow Reconciliation
Cash Flow Reconciliation Three Months Ended December 31, (S in millions) 2022 2021 Chonwe Net Cash from Operations (GAAP) $11,173 $14,480 (23)% Additions to Property and Equipment $(6,274) $(5,865) * Free Cash Flow $4,899 $8,615 (43)% Impact of tax payment related to the TCJA capitalization of R&D p
Slide 23: Copyright Microsoft Corporation
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