Bottom Line Up Front
Microsoft has achieved the following results in the last 10 years:
- Revenue (Mil): $39,788 to $83,433 [109% Increase]
- Profit Margins: 30.8% to 27.35% [11% Decrease]
- Cash Flow Per Share: $1.45 to $2.67 [84% Increase]
- Book Value Per Share: $4.45 to $10.25 [130% Increase]
- Outstanding Shares (Mil): 10906 to 8442 [22% Decrease]
- Dividends: $.32 to $.97 [203% Increase]
- Shareholder Returns: $20.34/share returned to shareholders through dividends and share buybacks
A lot of people have taken big issue with Microsoft, describing the company as a dying entity due to huge growth of Apple and it’s products over the last decade. This couldn’t be any further from the truth. While there is definitely validity to the claim that the global PC market is shrinking due to recent innovations of tablets and mobile phones, Microsoft sales far more than personal computers.
Windows Phone – The launch of Windows Phone 8 in late 2012 was a revival for Microsoft’s smartphone segment. By all accounts, Windows Phone is now the third biggest mobile network in the world, taking over after the fall of BlackBerry. There are approximately 245,000 apps that are available for Windows Phone users and there have been over 4 billion downloads to date.
Microsoft Office – The Office division is one of the biggest revenue generators for Microsoft and they recently released Office 2013 and Office 365 Home Premium (first consumer version of its cloud-based office subscription service.) To date Microsoft has over 3.5 million subscribers to the $99 a year service, which offers versions of Word, Excel and PowerPoint for up to five devices. In fact Office 365 is on track to become a 1.5 billion dollar business.
Surface Tablet – The launch of the original Surface tablet in October 2012, which has since been followed by upgraded versions, indicates that Microsoft is serious about entering the PC tablet space. While it is abundantly clear that the Surface has not surpassed Apple’s iPad in sales, it would be foolish to ignore the fact that Microsoft is collecting market share of the tablet industry.
XBox One – A lot of people fail to realize the enormous amount of market share Microsoft owns in the video game sector. Their main competitors in this sector are the “Sony Playstation” and “Nintendo Wii.” Microsoft launched their newest gaming console this year, The Xbox One which retails for $499. Unlike its predecessors the original Xbox and the Xbox 360, the Xbox One is an entertainment device which is far more versatile than a simple gaming console. This device supports streaming video apps and has the ability to connect to a cable TV box for expanded television control. Since the Xbox One launch, Microsoft has sold over 3 million units and users have logged over 740 million hours of use.
As you can see from these examples Microsoft is still a force to be reckoned with considerably. But I want to point out one important thing, even if you knew nothing about the intricate details of this company I have outlined their annual reporting for the last 10 years. You can clearly see that the trends for important key metrics have trended upwards significantly. If you knew nothing else and only remember one thing from this article, just know this…
Microsoft is a behemoth in the technology space and while they are no longer a significant growth story, the business produces enormous sums of free cash flow for investors.
Do you currently own Microsoft? How has it performed for you and what do you expect in the future?
This infographic is not a recommendation to purchase this stock but should be used as a reference for your own due diligence. I am not a registered financial advisor, anything you find on my site is for informational purposes only. Investors trade at their own risk.