MSFT

What is Microsoft (MSFT)?

Oh, you know, just one of the most successful technology companies in the world, largely credited for making computing accessible for the masses.

By market capitalisation, Microsoft Corporation is also one of the world’s largest companies, ranking third behind Apple (AAPL) and the Saudi Arabian Oil Company.

Founded by Paul Gardner Allen and Bill Gates in 1975, Microsoft was originally “Micro-Soft,” a portmanteau of microcomputer and software.

How does Microsoft make money?

Microsoft earns and reports revenue through three major business segments — Productivity and Business Processes, Intelligent Cloud and More Personal Computing. 

The Productivity and Business Processes segment’s revenue comes from the sale of products and services in Microsoft’s portfolio of productivity, communication and information services. These include but are not limited to Office 365 (Commercial and Consumer), Sharepoint, Teams, Skype for Business, LinkedIn and Dynamics 365.

The Intelligent Cloud segment earns revenue through the supply of public, private and hybrid server products as well as cloud services. These include Azure, SQL server and GitHub.

Lastly, revenue from the More Personal Computing segment comes from device agnostic products and services aimed at end users, developers, and IT professionals. Things like Windows, Windows cloud services, Windows Internet of Things, Xbox content and services, search and news advertising.

Is Microsoft profitable?

Yes, Microsoft is profitable. For a company that’s been pervasive for the best part of half a century, Microsoft continues to grow and impress.

Over the past 3 years alone, Microsoft’s revenue has grown by a compound annual growth rate (CAGR) of 14.5% from US$125.8b in FY2019 to US$143b in FY2020 to US$168b in FY2021.

Its operating income has grown by a CAGR of over 27.5% from US$43b in FY2019 to US$53b in FY2020 to US$70b in FY2021. 

Microsoft’s free cash flow sits at an impressive US$88b.

Does MSFT pay dividends?

Yes, Microsoft pays a small annual dividend yield of 0.86%. The dividend of US$0.62 is paid on a quarterly basis.

When does Microsoft report earnings?

Microsoft has traditionally reported quarterly earnings in March, June, September and December of each year.

Annual reports are usually made public in June.

Has MSFT ever split? 

Yes, Microsoft stock has split 9 times since the company went public in March 1986.

The splits have been as follows:

• 2:1 split on 18 September 1987

• 2:1 split on 12 April 1990

• 3:2 split on 26 June 1991

• 3:2 split on 12 June 1992

• 2:1 split on 20 May 1994

• 2:1 split on 6 December 1996

• 2:1 split on 20 February 1998

• 2:1 split on 26 March 1999

• 2:1 split on 14 February 2003

How many shares of MSFT does Bill Gates own?

At the end of FY2021, Bill Gates owned 1,937,703 MSFT shares via the Bill & Melinda Gates Foundation Trust. 

The stock makes up 2.84% of the trust’s portfolio and is approximately 0.025% of MSFT’s total shares.

Who owns the most shares of MSFT?

MSFT’s biggest shareholders are institutional. The top three shareholders are Vanguard Group (8.22%), BlackRock (6.92%) and State Street Global Advisors (4.04%).