Everyone who is into tech or business startups understands why Microsoft continues to be one of the best-performing companies in the world. Microsoft ranks at number 13 among the top 500 Fortune companies and the company’s remarkable achievement in the current technology world. You are in the right place if you want an in-depth insight into Microsoft's net worth and why the company continues to rank among the top tech companies.
Microsoft is one of the best case studies if you are looking for a company that continues to make it big in the tech industry. The success story behind Microsoft stems from the company’s products/services, like Windows, Office software programs, and its expanding presence in the cloud computing market.
The company is also investing in artificial intelligence and other cutting-edge technologies, thus positioning itself for accelerated growth and innovation in the future. Read this post for a bird’s eye view of Microsoft’s net worth and value in tech.
How much is Microsoft worth right now?
Determining Microsoft's precise net worth can be intricate, given its array of subsidiary companies. Nevertheless, Microsoft's estimated net worth exceeds $1.9 trillion. This impressive valuation is largely driven by its strong growth in cloud computing services and the enduring appeal of software staples like Windows and Office. Microsoft stands among the elite companies boasting a net worth surpassing $2 trillion, trailing closely behind its competitor, Apple Inc.
Microsoft’s stock price began performing remarkably after Satya Nadella (CEO) took over the reins in 2014. Microsoft’s stellar performance also stems from the company’s decision to stop producing smartphones and focus on supplying technology to business customers. The company’s cloud-based services are among the top services making Microsoft’s portfolio flourish.
Microsoft Net Worth Breakdown
As of May 2022, Microsoft's market capitalization stood at $1.91 trillion.
For the fiscal year ending in June 2021, Microsoft reported revenues of $168 billion, marking an 18% rise compared to the previous year.
In FY 2021, Microsoft's net income surged by 38% to reach $61.3 billion.
Cash and Short-term Investments
By June 2021, Microsoft had amasseda total of $104 billion in cash, cash equivalents, and short-term investments.
Primary Business Segments
Microsoft's largest revenue stream remains its commercial cloud services, encompassing Azure and Office 365, which garnered over $60 billion in FY 2021.
The company's stock price hovers around $260 per share, resulting in a price-to-earnings ratio of 27.
Contribution to S&P 500
Microsoft comprises over 7% of the S&P 500 index's total value.
Historical Market Cap Growth
Over the past five years, Microsoft's market cap has ballooned from roughly $800 billion to nearly its current $2 trillion valuation.
Currently, after Apple and Saudi Aramco, Microsoft holds its position as the 3rd most valuable public company globally.
Microsoft's founding and early history
The history behind Microsoft began on April 4, 1975, when Bill Gates and Paul Allen initially set up the company to develop and sell BASIC interpreters for the Altair 8800 microcomputer. However, the company’s major success came with the MS-DOS (Microsoft Disk Operating System), which later became the standard operating system for IBM-compatible personal computers in the 1980s. Microsoft became a trailblazer tech company since then with significant acquisitions like the purchase of Hotmail (now Outlook.com) in 1997 and Skype in 2011.
Microsoft's product and service portfolio
Microsoft's product and service portfolio offers a holistic picture of the company’s vast net worth. Below are some of the company’s product and service portfolios worth mentioning before getting into the company’s financial figures.
- Microsoft Office: It is a productivity suite software featuring applications like Word, Excel, PowerPoint, and Outlook. Microsoft Office's inception was in 1989 and has since become a standard in businesses/households worldwide.
- Windows Server: An enterprise environment offering a robust platform for network infrastructure and application deployment.
- Azure: Microsoft's cloud computing platform, offering Infrastructure as a Service/(IaaS), Platform as a Service/(PaaS), and Software as a Service/(SaaS) solutions for businesses/developers.
- SQL Server: SQL Server is a relational database management system/(RDBMS) developed by Microsoft for storing/managing large amounts of structured data.
- Xbox: Microsoft's gaming brand for developing gaming consoles, accessories, and a digital gaming platform.
- Surface: A line of hybrid tablets and laptops designed and developed by Microsoft, providing a combination of tablet portability and laptop productivity.
- Dynamics 365: A suite of enterprise resource planning (ERP) and customer relationship management (CRM) applications, it helps businesses manage their operations and customer relationships.
- Microsoft Teams: A collaboration platform that combines chat, video meetings, file sharing, and app integration, facilitating remote teamwork and communication.
- LinkedIn: Arguably the world's largest professional networking platform, acquired by Microsoft in 2016, enabling professionals to connect, share knowledge, and find job opportunities.
Microsoft’s recent acquisitions and investments
Below are Microsoft’s recent acquisitions and investments that are an addition to the growing list of the company’s subsidiary revenue stream.
- Minecraft: Microsoft acquired the popular sandbox video game Minecraft in 2014, expanding its presence in the gaming industry.
- GitHub: Microsoft acquired the leading software development platform GitHub in 2018, providing a community and tools for developers to collaborate on projects.
- Nuance Communications: In 2021, Microsoft announced the acquisition of Nuance Communications, a company specializing in conversational AI and healthcare technology, to enhance its healthcare offerings.
Microsoft’s key financial indicators
Below are some key financial indicators that can help you understand the financial position of the conglomerate Microsoft Company.
- Revenue: Microsoft's total income generated from its products and services was $207.591 Billion at the end of the first quarter of 2023, a 7.81% increase compared to the previous financial year.
- Net Income: Microsoft’s profit after deducting expenses, taxes, and other costs from its revenue was $18.299 Billion at the end of the first quarter of 2023.
- Gross Profit Margin: The percentage of revenue left after subtracting the cost of goods sold (COGS) was 68.45% at the end of the Q1 of 2023, with the TTM revenue at $207.59 Billion.
- Return on Equity (ROE): The ratio of net income to shareholders' equity was 19.66% at the end of Q1 of 2023.
- Earnings per Share (EPS): The Company’s EPS at the end of Q1 of 2023 was $ 2.45 per share, thus indicating a 10.36% increase compared to the previous year.
- Cash Flow: The amount of cash generated/used by the company's operating, investing, and financing activities was around $ 39,648.00 at the end of Q1 of 2023.
- Debt-to-Equity Ratio: The proportion of a company's debt divided by shareholders' equity was 0.22 at the end of Q1 of 2023, thus, showing the company's leverage or financial risk.
- Market Capitalization: The total value of a company's outstanding shares in the stock market (calculated by multiplying the share price by the number of outstanding shares) was $ 2,491.04 Billion at the end of Q1 of 2023.
The above financial details for Microsoft (Inc.) are subject to fluctuations as the year progresses, and it is essential to keep checking the real-time financial figures before making any investments in the tech conglomerate company. However, if you are looking for a reliable tech company to buy shares from, you should consider Microsoft because the company has withstood the test of time.