Archive for the ‘MS News’ Category

postheadericon Microsoft appoints Kevin Scott as Chief Technology Officer

REDMOND, Wash. – Jan. 24, 2017 Microsoft Corp. has named Kevin Scott to a newly created role of chief technology officer (CTO) for the company. This is an expansion of Scott’s new role at LinkedIn as senior vice president of Infrastructure. As Microsoft’s CTO, Scott will drive strategic, cross-company initiatives to maximize Microsoft’s impact with members and customers.

Scott joins Microsoft’s Senior Leadership Team, reporting directly to Microsoft Chief Executive Officer Satya Nadella.

“We are thrilled that Kevin will bring to Microsoft his unique expertise developing platforms and services that empower people and organizations,” Satya said. “Kevin’s first area of focus is to bring together the world’s leading professional network and professional cloud.”

“The thing that gets me up in the morning and that has always excited me about technology is its role in empowering people and helping to enrich their lives,” Scott said. “I am very optimistic about where Microsoft is headed and how we can continue to use technology to solve some of society’s most important challenges.”

Scott will continue to play an active role at LinkedIn as senior vice president of Infrastructure and remain a member of LinkedIn’s executive management team. His distinguished 20-year career spans both academia and industry as a researcher, engineer and leader. Prior to his role as senior vice president of Engineering and Operations at LinkedIn, Scott held a number of engineering leadership roles at Google and AdMob. Scott is an adviser to several Silicon Valley startups, an active angel investor and founder of the nonprofit organization Behind the Tech.

About Microsoft
Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more. 

Note to editors: A direct link to Scott’s executive bio can be found at http://news.microsoft.com/exec/kevin-scott/. For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. Shareholder and financial information is available at https://www.microsoft.com/en-us/Investor/

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postheadericon Microsoft Cloud strength highlights second quarter results

REDMOND, Wash. — January 26, 2017 — Microsoft Corp. today announced the following results for the quarter ended December 31, 2016:

  • Revenue was $ 24.1 billion GAAP, and $ 26.1 billion non-GAAP
  • Operating income was $ 6.2 billion GAAP, and $ 8.2 billion non-GAAP
  • Net income was $ 5.2 billion GAAP, and $ 6.5 billion non-GAAP
  • Diluted earnings per share was $ 0.66 GAAP, and $ 0.83 non-GAAP

Microsoft completed the acquisition of LinkedIn Corporation (“LinkedIn”) on December 8, 2016. Financial results from the acquired business are reported in the Productivity and Business Processes segment. For the second quarter of fiscal year 2017, the results of LinkedIn, including amortization of acquired intangible assets, contributed revenue, operating income, net income, and diluted earnings per share of $ 228 million, $ (201) million, $ (100) million, and $ (0.01), respectively.

“Our customers are seeing greater value and opportunity as we partner with them through their digital transformation,” said Satya Nadella, chief executive officer at Microsoft. “Accelerating advancements in AI across our platforms and services will provide further opportunity to drive growth in the Microsoft Cloud.”

The following table reconciles our financial results reported in accordance with generally accepted accounting principles (“GAAP”) to non-GAAP financial results. Microsoft has provided this non-GAAP financial information to aid investors in better understanding the company’s performance. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

Three Months Ended December 31,
($ in millions, except per share amounts) Revenue Operating Income Net Income Diluted Earnings per Share
2015 As Reported (GAAP) $ 23,796 $ 6,026 $ 5,018 $ 0.62
Net Impact from Windows 10 Revenue Deferrals 1,710 1,710 1,128 0.14
2015 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 25,506 $ 7,736 $ 6,146 $ 0.76
2016 As Reported (GAAP) $ 24,090 $ 6,177 $ 5,200 $ 0.66
Net Impact from Windows 10 Revenue Deferrals 1,976 1,976 1,315 0.17
2016 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 26,066 $ 8,153 $ 6,515 $ 0.83
Percentage Change Y/Y (GAAP) 1% 3% 4% 6%
Percentage Change Y/Y (non-GAAP) 2% 5% 6% 9%
Percentage Change Y/Y (non-GAAP) Constant Currency 4% 8% 10% 13%

 

Microsoft is providing the following table to help investors compare results for the second quarter of fiscal year 2017 to the guidance previously provided for the quarter, which excluded LinkedIn.

Three Months Ended December 31,
($ in millions, except per share amounts) Revenue Operating Income Net Income Diluted Earnings per Share
2015 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) from Table Above $ 25,506 $ 7,736 $ 6,146 $ 0.76
2016 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) from Table Above $ 26,066 $ 8,153 $ 6,515 $ 0.83
LinkedIn Results Including Amortization of Acquired Intangible Assets 228 (201) (100) (0.01)
2016 As Further Adjusted for Windows 10 Revenue Deferrals, Excluding LinkedIn Results (non-GAAP) $ 25,838 $ 8,354 $ 6,615 $ 0.84
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) 1% 8% 8% 11%
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) Constant Currency 3% 11% 12% 15%

Microsoft returned $ 6.5 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2017.

“I am pleased with our results this quarter. We see strong demand for our cloud-based services and are executing well on our long-term growth strategy,” said Amy Hood, executive vice president and chief financial officer at Microsoft.

Revenue in Productivity and Business Processes was $ 7.4 billion and increased 10% (up 12% in constant currency), with the following business highlights:

  • Office commercial products and cloud services revenue increased 5% (up 7% in constant currency) driven by Office 365 commercial revenue growth of 47% (up 49% in constant currency)
  • Office consumer products and cloud services revenue increased 22% (up 21% in constant currency) and Office 365 consumer subscribers increased to 24.9 million
  • Dynamics products and cloud services revenue increased 7% (up 9% in constant currency) driven by Dynamics 365 revenue growth
  • LinkedIn contributed revenue of $ 228 million for the period beginning on December 8, 2016

Revenue in Intelligent Cloud was $ 6.9 billion and increased 8% (up 10% in constant currency), with the following business highlights:

  • Server products and cloud services revenue increased 12% (up 14% in constant currency) driven by double-digit annuity revenue growth
  • Azure revenue increased 93% (up 95% in constant currency) with Azure compute usage more than doubling year-over-year
  • Enterprise Services revenue decreased 4% (down 2% in constant currency) with declines in custom support agreements offset by growth in Premier Support Services and consulting

Revenue in More Personal Computing was $ 11.8 billion and decreased 5% (down 4% in constant currency) driven primarily by lower phone revenue, with the following business highlights:

  • Windows OEM revenue increased 5% (up 5% in constant currency)
  • Windows commercial products and cloud services revenue increased 5% (up 6% in constant currency) driven by annuity revenue growth
  • Search advertising revenue excluding traffic acquisition costs increased 10% (up 11% in constant currency) driven by increased revenue per search and search volume
  • Gaming revenue decreased 3% (down 1% in constant currency) with lower Xbox console revenue offset by Xbox software and services revenue growth

Acquisitions and Divestitures

Microsoft completed the acquisition of LinkedIn on December 8, 2016 and the sale of its feature phone business in November 2016.

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Webcast Details

Satya Nadella, chief executive officer, Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, John Seethoff, deputy general counsel and corporate secretary, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor. The webcast will be available for replay through the close of business on January 26, 2018.

“As Adjusted” Financial Results and non-GAAP Measures

During the second quarter of fiscal years 2017 and 2016, GAAP revenue, operating income, net income, and diluted earnings per share include the net impact from Windows 10 revenue deferrals. During the second quarter of fiscal year 2017, GAAP revenue, operating income, net income, and diluted earnings per share include the results of LinkedIn. These items are defined below. In addition to these financial results reported in accordance with GAAP, Microsoft has provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. Presenting these non-GAAP measures gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance.

Net Impact from Windows 10 Revenue Deferrals. With respect to our non-GAAP measures related to Windows 10 revenue, we believe these measures bridge investor information and minimize potential confusion during the brief period between the time Windows 10 revenue recognition moved from upfront to ratable, and the adoption of the new revenue standard, when Windows 10 will again be recognized predominantly upfront. The net change in Windows 10 revenue from period to period is indicative of the net change in revenue we expect from adoption of the new revenue standard.

LinkedIn Results. With respect to our non-GAAP measure related to LinkedIn results, we believe this measure will help investors compare actual results for the second quarter of fiscal year 2017 to the guidance previously provided for the quarter, which excluded LinkedIn. We do not anticipate providing this non-GAAP measure in the future as our guidance will incorporate expected results for LinkedIn.

These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Non-GAAP Definitions

Net Impact from Windows 10 Revenue Deferrals. Microsoft recorded net revenue deferrals of $ 2.0 billion during the second quarter of fiscal year 2017 and net revenue deferrals of $ 1.7 billion during the second quarter of fiscal year 2016, related to Windows 10.

With the launch of Windows 10 in July 2015, Windows 10 customers receive future versions and updates at no additional charge. Under current revenue recognition accounting guidance, when standalone software is sold with future upgrade rights, revenue must be deferred over the life of the computing device on which it is installed. This is different from prior versions of Windows, which were sold without upgrade rights, where all revenue from original equipment manufacturer (“OEM”) customers was recognized at the time of billing, i.e., upfront.

When Microsoft adopts the new revenue standard, predominantly all Windows OEM revenue will be recognized at the time of billing, which is similar to the revenue recognition for prior versions of Windows. Additional information regarding the new revenue standard is provided in the “Recent Accounting Guidance Not Yet Adopted” section of Microsoft’s Form 10-Q for the quarter ended December 31, 2016 (Notes to Financial Statements). Microsoft reflects the recognition of Windows 10 revenue at the time of billing in “As Adjusted for Windows 10 Revenue Deferrals (non-GAAP)” revenue to provide comparability during the short period where Windows 10 will be recognized over the estimated life of a device, i.e., ratable, rather than at the time of billing.

LinkedIn Results. For the second quarter of fiscal year 2017, LinkedIn contributed revenue, operating income, net income, and diluted earnings per share of $ 228 million, $ (201) million, $ (100) million, and $ (0.01), respectively. Microsoft excludes the results of LinkedIn and reflects the recognition of Windows 10 revenue at the time of billing in “As Further Adjusted for Windows 10 Revenue Deferrals, Excluding LinkedIn Results (non-GAAP)” to help investors compare results for the second quarter of fiscal year 2017 to the guidance previously provided for the quarter, which excluded LinkedIn.

Constant Currency

Microsoft presents constant currency information to provide a non-GAAP framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period non-GAAP results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented below should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. All growth comparisons relate to the corresponding period in the last fiscal year.

Financial Performance Constant Currency Reconciliation

Three Months Ended December 31,
($ in millions, except per share amounts) Revenue Operating Income Net Income Diluted Earnings per Share
2015 As Reported (GAAP) $ 23,796 $ 6,026 $ 5,018 $ 0.62
2015 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 25,506 $ 7,736 $ 6,146 $ 0.76
2016 As Reported (GAAP) $ 24,090 $ 6,177 $ 5,200 $ 0.66
2016 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 26,066 $ 8,153 $ 6,515 $ 0.83
2016 As Further Adjusted for Windows 10 Revenue Deferrals, Excluding LinkedIn Results (non-GAAP) $ 25,838 $ 8,354 $ 6,615 $ 0.84
Percentage Change Y/Y (GAAP) 1% 3% 4% 6%
Percentage Change Y/Y (non-GAAP) 2% 5% 6% 9%
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) 1% 8% 8% 11%
Constant Currency Impact $ (339) $ (228) $ (260) $ (0.03)
Constant Currency Impact Excluding LinkedIn $ (333) $ (223) $ (251) $ (0.03)
Percentage Change Y/Y (non-GAAP) Constant Currency 4% 8% 10% 13%
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) Constant Currency 3% 11% 12% 15%

Segment Revenue Constant Currency Reconciliation

Three Months Ended December 31,
($ in millions) Productivity and Business Processes Intelligent Cloud More Personal Computing
2015 As Reported (GAAP) $ 6,690 $ 6,343 $ 12,473
2016 As Reported (GAAP) $ 7,382 $ 6,861 $ 11,823
Percentage Change Y/Y (GAAP) 10% 8% (5)%
Constant Currency Impact $ (108) $ (112) $ (119)
Percentage Change Y/Y (non-GAAP) Constant Currency 12% 10% (4)%

Selected Product and Service Revenue Constant Currency Reconciliation       

Three Months Ended December 31,
Percentage Change Y/Y (GAAP) Constant Currency Impact Percentage Change Y/Y (non-GAAP) Constant Currency
Office commercial products and cloud services 5% 2% 7%
Office 365 commercial 47% 2% 49%
Office consumer products and cloud services 22% (1)% 21%
Dynamics products and cloud services 7% 2% 9%
Server products and cloud services 12% 2% 14%
Azure 93% 2% 95%
Enterprise Services (4)% 2% (2)%
Windows OEM 5% 0% 5%
Windows commercial products and cloud services 5% 1% 6%
Search advertising excluding traffic acquisition costs 10% 1% 11%
Gaming (3)% 2% (1)%

 Commercial Cloud Annualized Revenue Run Rate

Commercial cloud annualized revenue run rate is calculated by taking revenue in the final month of the quarter multiplied by twelve for Office 365 commercial, Azure, Dynamics 365, and other cloud properties.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world and its mission is to empower every person and every organization on the planet to achieve more.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

  • intense competition in all of Microsoft’s markets;
  • increasing focus on services presents execution and competitive risks;
  • significant investments in new products and services that may not be profitable;
  • acquisitions, joint ventures, and strategic alliances may have an adverse effect on our business;
  • impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;
  • Microsoft’s continued ability to protect and earn revenues from its intellectual property rights;
  • claims that Microsoft has infringed the intellectual property rights of others;
  • the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;
  • cyber-attacks and security vulnerabilities in Microsoft products and services that could reduce revenue or lead to liability;
  • disclosure of personal data that could cause liability and harm to Microsoft’s reputation;
  • outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;
  • government litigation and regulation that may limit how Microsoft designs and markets its products;
  • potential liability under trade protection and anti-corruption laws resulting from our international operations;
  • laws and regulations relating to the handling of personal data may impede the adoption of our services or result in increased costs, legal claims, or fines against us;
  • Microsoft’s ability to attract and retain talented employees;
  • adverse results in legal disputes;
  • unanticipated tax liabilities;
  • Microsoft’s hardware and software products may experience quality or supply problems;
  • exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange;
  • catastrophic events or geo-political conditions may disrupt our business; and
  • adverse economic or market conditions may harm our business.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/en-us/investor.

All information in this release is as of January 26, 2017. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at http://www.microsoft.com/en-us/investor.

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postheadericon Microsoft announces debt offerings

REDMOND, Wash. — Jan. 30, 2017 — Microsoft Corp. on Jan. 30 announced the pricing of its offering of $ 17.00 billion aggregate principal amount of senior unsecured notes. The notes consist of the following tranches:

  • $ 1.50 billion of 1.850 percent notes due February 6, 2020
  • $ 1.75 billion of 2.400 percent notes due February 6, 2022
  • $ 2.25 billion of 2.875 percent notes due February 6, 2024
  • $ 4.00 billion of 3.300 percent notes due February 6, 2027
  • $ 2.50 billion of 4.100 percent notes due February 6, 2037
  • $ 3.00 billion of 4.250 percent notes due February 6, 2047
  • $ 2.00 billion of 4.500 percent notes due February 6, 2057

Microsoft intends to use the net proceeds from the offering for general corporate purposes, which may include, among other things, funding for working capital, capital expenditures, repurchases of its capital stock, acquisitions, and repayment of its existing debt. The offerings are expected to close on February 6, 2017.

The joint book-running managers for the offering are Barclays Capital Inc., HSBC Securities (USA) Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Inc., Morgan Stanley & Co. LLC, U.S. Bancorp Investments Inc., BNP Paribas Securities Corp., and BNY Mellon Capital Markets LLC. The co-managers for the offering are Academy Securities, Inc., Blaylock Beal Van, LLC, CAVU Securities, LLC, C.L. King & Associates, Inc., Drexel Hamilton, LLC, Mischler Financial Group, Inc., Samuel A. Ramirez & Company, Inc. and Siebert Cisneros Shank & Co., L.L.C.

A copy of the prospectus relating to the offering may be obtained by calling Barclays Capital Inc. toll-free at 1 (888) 603-5847 or by emailing barclaysprospectus@broadridge.com; by calling HSBC Securities (USA) Inc. toll-free at 1 (866) 811-8049; by calling Citigroup Global Markets Inc. toll-free at 1 (800) 831-9146 or by emailing prospectus@citi.com; by calling Credit Suisse Securities (USA) LLC toll-free at 1 (800) 221-1037; by calling Goldman, Sachs & Co. toll-free at 1 (866) 471-2526 or by emailing prospectus-ny@ny.email.gs.com; by calling J.P. Morgan Securities LLC collect at 1 (212) 834-4533; by calling Merrill Lynch, Pierce, Fenner & Smith Inc. toll-free at 1 (800) 294-1322; by calling Morgan Stanley & Co. LLC toll-free at 1 (866) 718-1649 or by emailing prospectus@morganstanley.com; by calling U.S. Bancorp Investments Inc. toll-free at 1 (877) 558-2607; by calling BNP Paribas Securities Corp. toll-free at 1 (800) 854-5674; by calling BNY Mellon Capital Markets LLC toll-free at 1 (800) 269-6864; or by contacting any of the other underwriters of the offering.

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft Media Relations or other appropriate contacts listed at http://news.microsoft.com/microsoft-public-relations-contacts.

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postheadericon Microsoft appoints Kevin Scott as Chief Technology Officer

REDMOND, Wash. – Jan. 24, 2017 Microsoft Corp. has named Kevin Scott to a newly created role of chief technology officer (CTO) for the company. This is an expansion of Scott’s new role at LinkedIn as senior vice president of Infrastructure. As Microsoft’s CTO, Scott will drive strategic, cross-company initiatives to maximize Microsoft’s impact with members and customers.

Scott joins Microsoft’s Senior Leadership Team, reporting directly to Microsoft Chief Executive Officer Satya Nadella.

“We are thrilled that Kevin will bring to Microsoft his unique expertise developing platforms and services that empower people and organizations,” Satya said. “Kevin’s first area of focus is to bring together the world’s leading professional network and professional cloud.”

“The thing that gets me up in the morning and that has always excited me about technology is its role in empowering people and helping to enrich their lives,” Scott said. “I am very optimistic about where Microsoft is headed and how we can continue to use technology to solve some of society’s most important challenges.”

Scott will continue to play an active role at LinkedIn as senior vice president of Infrastructure and remain a member of LinkedIn’s executive management team. His distinguished 20-year career spans both academia and industry as a researcher, engineer and leader. Prior to his role as senior vice president of Engineering and Operations at LinkedIn, Scott held a number of engineering leadership roles at Google and AdMob. Scott is an adviser to several Silicon Valley startups, an active angel investor and founder of the nonprofit organization Behind the Tech.

About Microsoft
Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more. 

Note to editors: A direct link to Scott’s executive bio can be found at http://news.microsoft.com/exec/kevin-scott/. For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. Shareholder and financial information is available at https://www.microsoft.com/en-us/Investor/

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postheadericon Microsoft Cloud strength highlights second quarter results

REDMOND, Wash. — January 26, 2017 — Microsoft Corp. today announced the following results for the quarter ended December 31, 2016:

  • Revenue was $ 24.1 billion GAAP, and $ 26.1 billion non-GAAP
  • Operating income was $ 6.2 billion GAAP, and $ 8.2 billion non-GAAP
  • Net income was $ 5.2 billion GAAP, and $ 6.5 billion non-GAAP
  • Diluted earnings per share was $ 0.66 GAAP, and $ 0.83 non-GAAP

Microsoft completed the acquisition of LinkedIn Corporation (“LinkedIn”) on December 8, 2016. Financial results from the acquired business are reported in the Productivity and Business Processes segment. For the second quarter of fiscal year 2017, the results of LinkedIn, including amortization of acquired intangible assets, contributed revenue, operating income, net income, and diluted earnings per share of $ 228 million, $ (201) million, $ (100) million, and $ (0.01), respectively.

“Our customers are seeing greater value and opportunity as we partner with them through their digital transformation,” said Satya Nadella, chief executive officer at Microsoft. “Accelerating advancements in AI across our platforms and services will provide further opportunity to drive growth in the Microsoft Cloud.”

The following table reconciles our financial results reported in accordance with generally accepted accounting principles (“GAAP”) to non-GAAP financial results. Microsoft has provided this non-GAAP financial information to aid investors in better understanding the company’s performance. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

Three Months Ended December 31,
($ in millions, except per share amounts) Revenue Operating Income Net Income Diluted Earnings per Share
2015 As Reported (GAAP) $ 23,796 $ 6,026 $ 5,018 $ 0.62
Net Impact from Windows 10 Revenue Deferrals 1,710 1,710 1,128 0.14
2015 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 25,506 $ 7,736 $ 6,146 $ 0.76
2016 As Reported (GAAP) $ 24,090 $ 6,177 $ 5,200 $ 0.66
Net Impact from Windows 10 Revenue Deferrals 1,976 1,976 1,315 0.17
2016 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 26,066 $ 8,153 $ 6,515 $ 0.83
Percentage Change Y/Y (GAAP) 1% 3% 4% 6%
Percentage Change Y/Y (non-GAAP) 2% 5% 6% 9%
Percentage Change Y/Y (non-GAAP) Constant Currency 4% 8% 10% 13%

 

Microsoft is providing the following table to help investors compare results for the second quarter of fiscal year 2017 to the guidance previously provided for the quarter, which excluded LinkedIn.

Three Months Ended December 31,
($ in millions, except per share amounts) Revenue Operating Income Net Income Diluted Earnings per Share
2015 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) from Table Above $ 25,506 $ 7,736 $ 6,146 $ 0.76
2016 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) from Table Above $ 26,066 $ 8,153 $ 6,515 $ 0.83
LinkedIn Results Including Amortization of Acquired Intangible Assets 228 (201) (100) (0.01)
2016 As Further Adjusted for Windows 10 Revenue Deferrals, Excluding LinkedIn Results (non-GAAP) $ 25,838 $ 8,354 $ 6,615 $ 0.84
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) 1% 8% 8% 11%
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) Constant Currency 3% 11% 12% 15%

Microsoft returned $ 6.5 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2017.

“I am pleased with our results this quarter. We see strong demand for our cloud-based services and are executing well on our long-term growth strategy,” said Amy Hood, executive vice president and chief financial officer at Microsoft.

Revenue in Productivity and Business Processes was $ 7.4 billion and increased 10% (up 12% in constant currency), with the following business highlights:

  • Office commercial products and cloud services revenue increased 5% (up 7% in constant currency) driven by Office 365 commercial revenue growth of 47% (up 49% in constant currency)
  • Office consumer products and cloud services revenue increased 22% (up 21% in constant currency) and Office 365 consumer subscribers increased to 24.9 million
  • Dynamics products and cloud services revenue increased 7% (up 9% in constant currency) driven by Dynamics 365 revenue growth
  • LinkedIn contributed revenue of $ 228 million for the period beginning on December 8, 2016

Revenue in Intelligent Cloud was $ 6.9 billion and increased 8% (up 10% in constant currency), with the following business highlights:

  • Server products and cloud services revenue increased 12% (up 14% in constant currency) driven by double-digit annuity revenue growth
  • Azure revenue increased 93% (up 95% in constant currency) with Azure compute usage more than doubling year-over-year
  • Enterprise Services revenue decreased 4% (down 2% in constant currency) with declines in custom support agreements offset by growth in Premier Support Services and consulting

Revenue in More Personal Computing was $ 11.8 billion and decreased 5% (down 4% in constant currency) driven primarily by lower phone revenue, with the following business highlights:

  • Windows OEM revenue increased 5% (up 5% in constant currency)
  • Windows commercial products and cloud services revenue increased 5% (up 6% in constant currency) driven by annuity revenue growth
  • Search advertising revenue excluding traffic acquisition costs increased 10% (up 11% in constant currency) driven by increased revenue per search and search volume
  • Gaming revenue decreased 3% (down 1% in constant currency) with lower Xbox console revenue offset by Xbox software and services revenue growth

Acquisitions and Divestitures

Microsoft completed the acquisition of LinkedIn on December 8, 2016 and the sale of its feature phone business in November 2016.

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Webcast Details

Satya Nadella, chief executive officer, Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, John Seethoff, deputy general counsel and corporate secretary, and Chris Suh, general manager of Investor Relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor. The webcast will be available for replay through the close of business on January 26, 2018.

“As Adjusted” Financial Results and non-GAAP Measures

During the second quarter of fiscal years 2017 and 2016, GAAP revenue, operating income, net income, and diluted earnings per share include the net impact from Windows 10 revenue deferrals. During the second quarter of fiscal year 2017, GAAP revenue, operating income, net income, and diluted earnings per share include the results of LinkedIn. These items are defined below. In addition to these financial results reported in accordance with GAAP, Microsoft has provided certain non-GAAP financial information to aid investors in better understanding the company’s performance. Presenting these non-GAAP measures gives additional insight into operational performance and helps clarify trends affecting the company’s business. For comparability of reporting, management considers this information in conjunction with GAAP amounts in evaluating business performance.

Net Impact from Windows 10 Revenue Deferrals. With respect to our non-GAAP measures related to Windows 10 revenue, we believe these measures bridge investor information and minimize potential confusion during the brief period between the time Windows 10 revenue recognition moved from upfront to ratable, and the adoption of the new revenue standard, when Windows 10 will again be recognized predominantly upfront. The net change in Windows 10 revenue from period to period is indicative of the net change in revenue we expect from adoption of the new revenue standard.

LinkedIn Results. With respect to our non-GAAP measure related to LinkedIn results, we believe this measure will help investors compare actual results for the second quarter of fiscal year 2017 to the guidance previously provided for the quarter, which excluded LinkedIn. We do not anticipate providing this non-GAAP measure in the future as our guidance will incorporate expected results for LinkedIn.

These non-GAAP financial measures should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Non-GAAP Definitions

Net Impact from Windows 10 Revenue Deferrals. Microsoft recorded net revenue deferrals of $ 2.0 billion during the second quarter of fiscal year 2017 and net revenue deferrals of $ 1.7 billion during the second quarter of fiscal year 2016, related to Windows 10.

With the launch of Windows 10 in July 2015, Windows 10 customers receive future versions and updates at no additional charge. Under current revenue recognition accounting guidance, when standalone software is sold with future upgrade rights, revenue must be deferred over the life of the computing device on which it is installed. This is different from prior versions of Windows, which were sold without upgrade rights, where all revenue from original equipment manufacturer (“OEM”) customers was recognized at the time of billing, i.e., upfront.

When Microsoft adopts the new revenue standard, predominantly all Windows OEM revenue will be recognized at the time of billing, which is similar to the revenue recognition for prior versions of Windows. Additional information regarding the new revenue standard is provided in the “Recent Accounting Guidance Not Yet Adopted” section of Microsoft’s Form 10-Q for the quarter ended December 31, 2016 (Notes to Financial Statements). Microsoft reflects the recognition of Windows 10 revenue at the time of billing in “As Adjusted for Windows 10 Revenue Deferrals (non-GAAP)” revenue to provide comparability during the short period where Windows 10 will be recognized over the estimated life of a device, i.e., ratable, rather than at the time of billing.

LinkedIn Results. For the second quarter of fiscal year 2017, LinkedIn contributed revenue, operating income, net income, and diluted earnings per share of $ 228 million, $ (201) million, $ (100) million, and $ (0.01), respectively. Microsoft excludes the results of LinkedIn and reflects the recognition of Windows 10 revenue at the time of billing in “As Further Adjusted for Windows 10 Revenue Deferrals, Excluding LinkedIn Results (non-GAAP)” to help investors compare results for the second quarter of fiscal year 2017 to the guidance previously provided for the quarter, which excluded LinkedIn.

Constant Currency

Microsoft presents constant currency information to provide a non-GAAP framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period non-GAAP results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented below should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. All growth comparisons relate to the corresponding period in the last fiscal year.

Financial Performance Constant Currency Reconciliation

Three Months Ended December 31,
($ in millions, except per share amounts) Revenue Operating Income Net Income Diluted Earnings per Share
2015 As Reported (GAAP) $ 23,796 $ 6,026 $ 5,018 $ 0.62
2015 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 25,506 $ 7,736 $ 6,146 $ 0.76
2016 As Reported (GAAP) $ 24,090 $ 6,177 $ 5,200 $ 0.66
2016 As Adjusted for Windows 10 Revenue Deferrals (non-GAAP) $ 26,066 $ 8,153 $ 6,515 $ 0.83
2016 As Further Adjusted for Windows 10 Revenue Deferrals, Excluding LinkedIn Results (non-GAAP) $ 25,838 $ 8,354 $ 6,615 $ 0.84
Percentage Change Y/Y (GAAP) 1% 3% 4% 6%
Percentage Change Y/Y (non-GAAP) 2% 5% 6% 9%
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) 1% 8% 8% 11%
Constant Currency Impact $ (339) $ (228) $ (260) $ (0.03)
Constant Currency Impact Excluding LinkedIn $ (333) $ (223) $ (251) $ (0.03)
Percentage Change Y/Y (non-GAAP) Constant Currency 4% 8% 10% 13%
Percentage Change Y/Y Excluding LinkedIn Results (non-GAAP) Constant Currency 3% 11% 12% 15%

Segment Revenue Constant Currency Reconciliation

Three Months Ended December 31,
($ in millions) Productivity and Business Processes Intelligent Cloud More Personal Computing
2015 As Reported (GAAP) $ 6,690 $ 6,343 $ 12,473
2016 As Reported (GAAP) $ 7,382 $ 6,861 $ 11,823
Percentage Change Y/Y (GAAP) 10% 8% (5)%
Constant Currency Impact $ (108) $ (112) $ (119)
Percentage Change Y/Y (non-GAAP) Constant Currency 12% 10% (4)%

Selected Product and Service Revenue Constant Currency Reconciliation       

Three Months Ended December 31,
Percentage Change Y/Y (GAAP) Constant Currency Impact Percentage Change Y/Y (non-GAAP) Constant Currency
Office commercial products and cloud services 5% 2% 7%
Office 365 commercial 47% 2% 49%
Office consumer products and cloud services 22% (1)% 21%
Dynamics products and cloud services 7% 2% 9%
Server products and cloud services 12% 2% 14%
Azure 93% 2% 95%
Enterprise Services (4)% 2% (2)%
Windows OEM 5% 0% 5%
Windows commercial products and cloud services 5% 1% 6%
Search advertising excluding traffic acquisition costs 10% 1% 11%
Gaming (3)% 2% (1)%

 Commercial Cloud Annualized Revenue Run Rate

Commercial cloud annualized revenue run rate is calculated by taking revenue in the final month of the quarter multiplied by twelve for Office 365 commercial, Azure, Dynamics 365, and other cloud properties.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world and its mission is to empower every person and every organization on the planet to achieve more.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

  • intense competition in all of Microsoft’s markets;
  • increasing focus on services presents execution and competitive risks;
  • significant investments in new products and services that may not be profitable;
  • acquisitions, joint ventures, and strategic alliances may have an adverse effect on our business;
  • impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;
  • Microsoft’s continued ability to protect and earn revenues from its intellectual property rights;
  • claims that Microsoft has infringed the intellectual property rights of others;
  • the possibility of unauthorized disclosure of significant portions of Microsoft’s source code;
  • cyber-attacks and security vulnerabilities in Microsoft products and services that could reduce revenue or lead to liability;
  • disclosure of personal data that could cause liability and harm to Microsoft’s reputation;
  • outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;
  • government litigation and regulation that may limit how Microsoft designs and markets its products;
  • potential liability under trade protection and anti-corruption laws resulting from our international operations;
  • laws and regulations relating to the handling of personal data may impede the adoption of our services or result in increased costs, legal claims, or fines against us;
  • Microsoft’s ability to attract and retain talented employees;
  • adverse results in legal disputes;
  • unanticipated tax liabilities;
  • Microsoft’s hardware and software products may experience quality or supply problems;
  • exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange;
  • catastrophic events or geo-political conditions may disrupt our business; and
  • adverse economic or market conditions may harm our business.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/en-us/investor.

All information in this release is as of January 26, 2017. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://www.microsoft.com/news. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at http://www.microsoft.com/en-us/investor.

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postheadericon Microsoft announces quarterly earnings release date

REDMOND, Wash. — Jan. 6, 2017 — Microsoft Corp. will publish fiscal year 2017 second-quarter financial results after the close of the market on Thursday, Jan. 26, 2017, on the Microsoft Investor Relations website at https://www.microsoft.com/en-us/Investor/. A live webcast of the earnings conference call will be made available at 2:30 p.m. Pacific Time.

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. Shareholder and financial information is available at https://www.microsoft.com/en-us/Investor/.

 

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postheadericon Microsoft, NXP Semiconductors, IAV and auto mobility partners showcase innovations for safe, secure and personalized automated driving at CES 2017

LAS VEGAS — Jan. 3, 2017 — At CES 2017 from Jan. 4‒8 in Las Vegas, Microsoft Corp., NXP Semiconductors, IAV, and auto mobility partners Cubic Telecom, Esri and Swiss Re will showcase their collective vision of safe and secure end-to-end mobility through a highly automated driving demonstration and experience.

From the Gold Lot/North Plaza NP-2 of the Las Vegas Convention Center, CES attendees can take a test drive in a highly automated vehicle to understand how the cloud and artificial intelligence can enable personalized in-car experiences. Attendees will see how cars securely “talk” to other cars, how they monitor what is happening in their surroundings to improve safety, and how cars can adapt to different driving styles to deliver more personal driving experiences. Participants will also learn how these emerging technologies will enable new, flexible insurance models.

The following technology will be integrated into the conceptual demonstration at CES:

  • Microsoft will showcase future scenarios where artificial intelligence bots can help improve driver safety, engagement, and integration with calendars and personal preferences. Microsoft will also analyze current traffic situations and pedestrian density in real time based on sensor data such as V2X, radar, camera and LIDAR, using the Microsoft Azure Cloud.
  • NXP Semiconductors will showcase improved road safety and traffic flow via secure communications between vehicles (V2V) and between vehicles and the surrounding infrastructure (V2I). Use cases will include collision warnings, intelligent traffic lights and vulnerable road-user detection at intersections — all based on NXP’s automotive RoadLINK products. NXP cooperates with Delphi and Savari for the onboard and roadside units.
  • IAV has developed highly automated driving technology. Automated driving is a major contributor in the quest to improve urban congestion and reduce its associated ‎pollution. The highly automated driving vehicle is capable of connecting with infrastructure, pedestrians and the Microsoft Azure Cloud to enable the vehicle to react automatically and safely in its surroundings.
  • Esri’s mapping and spatial analytics technology, which talks to Microsoft Cortana, provides the geospatial context to increase safety on the road and improve the overall driver experience. Esri’s enterprise GIS platform services in the Azure Cloud provide the geographic content and analytics to better understand driver behavior, predict road conditions to improve traffic flow, and share connected car sensor data within the ecosystem. These features allow smart cities to react faster to new issues such as fixing unsafe potholes or removing hazardous objects from the road.
  • Swiss Re’s smart insurance models simulate personalized, flexible insurance coverage using Microsoft Azure technology to offer future connected mobility solutions.
  • Full 4G LTE connectivity by Cubic Telecom powers high-quality, always-on infotainment along with access to competitive bundled service plans that include Wi-Fi hotspot services, personal apps and more.

Quotes

“As cars get smarter, they need more software and analytics capabilities,” said Kevin Dallas, corporate vice president of business development for Microsoft. “This collaboration at CES 2017 is another example of how we work together to continue testing, to see what sticks, and to help automakers bring truly personalized experiences to drivers and services that learn unique behaviors and can make improvements over time.”

“Self-driving cars must be perfectly safe and secure,” said Lars Reger, senior vice president and chief technology officer of automotive at NXP Semiconductors. “This requires firstly: an array of high-performance sensors; secondly: a powerful detection and sensor fusion system complemented with cloud connectivity; and thirdly: an efficient system play with industry leaders. We are happy to see all of this come together in our joint showcase at CES.”

“IAV has several test vehicles demonstrating the current state of this future technology in Europe and in the United States,” said Karsten Schulze, senior vice president of active safety and driver assistance at IAV. “Those vehicles have already covered a huge number of miles with almost no intervention from the driver.”

CES attendees interested in seeing the live connected vehicle demonstration can participate in a drive event, located at the Gold Lot/North Plaza NP-2 from Jan. 5-8. Executives from all participating companies will be onsite to detail the technology.

Media demonstrations

Members of the media can book a demonstration on the Jan. 4 media day or at another time through Jan. 8. Send a request by email to arrange a time.

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.

Links to all partner webpages

Microsoft (Nasdaq “MSFT” @Microsoft): www.microsoft.com
NXP Semiconductors (NASDAQ “NXPI” @NXP): www.nxp.com/automotive
IAV Automotive Engineering: https://www.iav.com/
Esri: (@Esri): http://www.esri.com/
Swiss Re: http://www.swissre.com/
Cubic Telecom: (@cubictelecom): http://www.cubictelecom.com

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com.Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://news.microsoft.com/microsoft-public-relations-contacts.

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postheadericon Microsoft HoloLens is coming to Japan

TOKYO — Nov. 29, 2016 — Microsoft Corp. announced on Tuesday that Microsoft HoloLens, the world’s first self-contained holographic computer running Windows 10, will be available for preorder in Japan starting Dec. 2. Devices will begin to ship in early 2017.

Today’s news comes just six weeks after Microsoft HoloLens Development Edition and Microsoft HoloLens Commercial Suite expanded globally to six new markets. With this milestone HoloLens is now available in Australia, Canada, France, Germany, Ireland, Japan, New Zealand, the United Kingdom and the United States (including Puerto Rico).

“Our mission at Microsoft is to bring mixed reality to every person and organization on the planet,” said Alex Kipman, technical fellow, Microsoft Windows and Devices Group. “Since January 2015 we have been hard at work to bring the vision of mixed reality to life. It has been inspiring to see what has been created by our partners, and the team remains in awe of the way developers are using HoloLens. We can’t wait to see what everyone in Japan creates when they get their hands on HoloLens.”

Commercial customers breaking new ground with Microsoft HoloLens

HoloLens has transformed how companies work with their three-dimensional data, delivering new ways to design, create, collaborate and explore. More information about how companies are changing the way they work is available here.

One of the companies innovating with HoloLens is Japan Airlines. Using Microsoft HoloLens, Japan Airlines has developed two proof-of-concept programs to provide supplemental training for engine mechanics, and for flight crew trainees who want to be promoted to co-pilot status. Microsoft is very excited to have Japan Airlines on this holographic journey.

Microsoft’s mixed-reality movement is just beginning

Today, HoloLens customers are developing innovative solutions that are already having a positive impact on their business. These customers are the early adopters of the kind of mixed-reality solutions that are poised for exponential growth in the years to come. According to IDC, “worldwide revenues for the augmented reality and virtual reality market will grow from $ 5.2 billion in 2016 to more than $ 162 billion in 2020.”* Windows 10 will be updated in 2017 to include Windows Holographic, the platform that powers the mixed-reality experiences enabling people to perceive the world differently, break down barriers, and bring the virtual and the physical worlds together.

Microsoft HoloLens available to preorder in Japan now

Microsoft first announced HoloLens in January 2015 and shipped to developers and commercial partners in Canada and the United States on March 31, 2016. Microsoft HoloLens is available for preorder Dec. 2, exclusively from the Microsoft Store in Japan, with devices starting to ship in early 2017.

More about the Microsoft HoloLens Development Edition and Commercial Suite, and Windows Holographic, can be found here.

Microsoft (Nasdaq “MSFT” @Microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.

* IDC press release, “Worldwide Revenues for Augmented and Virtual Reality Forecast to Reach $ 162 Billion in 2020, According to IDC,” Aug. 15, 2016

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://news.microsoft.com/microsoft-public-relations-contacts.

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postheadericon Microsoft empowers new development opportunities in mixed reality, gaming and cellular PCs

SHENZHEN, China — Dec. 8, 2016 Thursday, at the Windows Hardware Engineering Community event (WinHEC) in Shenzhen, China, Microsoft Corp. announced new opportunities for global partners to innovate with Windows 10. Terry Myerson, executive vice president, Windows and Devices Group, Microsoft, was joined on stage in Shenzhen by Navin Shenoy, senior vice president and general manager for the Client Computing Group, Intel Corporation, and Cristiano Amon, executive vice president, Qualcomm Technologies Inc., and president of Qualcomm CDMA Technologies. Together, the companies showcased new ways for partners to build modern devices that will empower the next generation of creators.

“I feel energized to be among this community of hardware engineering creators at WinHEC, who are building the next generation of modern, secure PCs that support innovative mixed-reality, gaming and mobile experiences,” Myerson said. “With the Windows 10 Creators Update and our partnerships with Qualcomm and Intel, we can build technology that serves all of us by ensuring there are devices for the creator in each of us.”

A new wave of modern PCs

Microsoft announced its latest collaboration with Intel, code-named “Project Evo.” With “Project Evo,” Microsoft and Intel will deliver all-new ways for devices to light up with the latest in advanced security, artificial intelligence and Cortana, mixed reality, and gaming. Through this collaboration, devices of the future will leverage Microsoft and Intel innovations, including the following:

  • Far-field speech communications so you can ask Cortana a question or play a song from across the room.
  • The latest security capabilities to protect devices from malware and hacking threats, advances in biometric authentication with Windows Hello, sophisticated insights from Microsoft’s Intelligent Security Graph, and additional world-class security intelligence and analytics from Intel.
  • Mixed-reality experiences for everyone through affordable PCs and head-mounted displays (HMDs) that blend the physical and virtual realities in ways no other platform can.
  • Gaming innovations like eSports, game broadcasting, and support for 4K, High Dynamic Range (HDR), Wide Color Gamut (WCG), spatial audio, and Xbox controllers with native Bluetooth.

Together, our work will extend these experiences to hundreds of millions of PC and HMD customers and raise the bar for what’s possible with Windows PCs.

Making mixed reality mainstream

  • Submitted Microsoft HoloLens for government approval in China for availability to developers and commercial customers here in the first half of 2017.
  • Shared the specifications that we co-developed with Intel for PCs that will power the first headsets capable of mixed reality. HMDs from Acer, ASUS, Dell, HP and Lenovo will be available next year.
  • Joining these partners, 3Glasses, the leading China-based hardware developer for HMDs, will bring the Windows 10 experience to its S1 device in the first half of 2017, reaching more than 5 million monthly active customers in China.
  • Customers will gain access to mixed-reality content:
    • More than 20,000 universal Windows apps in the catalog
    • 3-D objects from the web using Microsoft Edge to drag and drop into their physical world
    • Immersive WebVR content via Microsoft Edge
    • 360-degree videos available for the first time in the Microsoft Movies & TV app
  • As well, HMD developer kits will become available to developers at the Game Developers Conference in San Francisco.

Windows with cellular connectivity

In future Windows 10 updates, Microsoft will enable connectivity that is always within reach. Customers will be able to easily buy data directly from the Windows Store and be in control of how they use Wi-Fi and cellular networks, consume data, and manage costs. Partners will be able to build always-connected devices without hindering form-factor design.  Specifically, partners can take advantage of eSIM technology to build devices without an exposed SIM slot, making it easier for people to activate a data plan right on their device.

To deliver on customers’ growing need to create on the go, Microsoft announced that Windows 10 is coming to ARM architecture through a partnership with Qualcomm. For the first time, customers will be able to experience the Windows they know with the apps, peripherals and enterprise capabilities they require, on a truly mobile, power-efficient, always-connected cellular PC.

Hardware partners will be able to build a range of new Qualcomm Snapdragon-powered Windows 10 PCs that run x86 Win32 and universal Windows apps, including Adobe Photoshop, Microsoft Office and popular Windows games.

These new devices are expected to be in market as early as next year.

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more. 

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://news.microsoft.com/microsoft-public-relations-contacts.

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postheadericon Microsoft holds annual shareholder meeting

REDMOND, Wash. — Nov. 30, 2016 — Speaking to shareholders at Microsoft Corp.’s annual meeting on Wednesday, Chief Executive Officer Satya Nadella highlighted how digital technology is transforming people and organizations across the world, and the opportunity for Microsoft.

“Digital technology is impacting and transforming every human endeavor in every industry,” Nadella said. “Microsoft empowers our customers who want to harness new technology, like artificial intelligence, to transform their organizations and find solutions to the biggest challenges in healthcare, agriculture, finance, government — every sector.”

Executive Vice President and Chief Financial Officer Amy Hood reported that Microsoft executed well in fiscal year 2016 and reported a strong start to the current fiscal year. Hood noted that Microsoft’s innovation road map and disciplined investment expand addressable market opportunities and position the company for growth — an investment in the future that will deliver value for shareholders.

The following proposals were acted on by the company’s shareholders at the meeting:

  • Re-elected all 11 directors to serve until the next annual meeting of shareholders. All director nominees received a vote of 98 percent of votes cast.
  • Approved, on a nonbinding advisory basis, the fiscal year 2016 compensation of the company’s named executive officers. The advisory measure received 95 percent of votes cast.
  • Ratified the selection of Deloitte & Touche LLP as the company’s independent auditor for fiscal year 2017, with a vote of 98 percent of votes cast.
  • Approved an amendment to Microsoft’s Amended and Restated Articles of Incorporation, with a vote of 99 percent of votes cast.
  • Approved a French Sub Plan under the 2001 Stock Plan, with a vote of 96 percent of votes cast.
  • Rejected a shareholder proposal to make amendments to the current Proxy Access for Director Nominations bylaw; the proposal received approximately 26 percent of votes cast.

Microsoft’s board of directors consists of John W. Thompson, Microsoft independent chairman; William H. Gates, Microsoft founder and technology advisor; Teri List-Stoll, former executive vice president and chief financial officer of DICK’S Sporting Goods Inc.; G. Mason Morfit, president, ValueAct Capital; Satya Nadella, chief executive officer, Microsoft; Charles H. Noski, former vice chairman of Bank of America Corp.; Dr. Helmut Panke, former chairman of the board of management, BMW AG; Sandra E. Peterson, group worldwide chairman, Johnson & Johnson; Charles W. Scharf, chief executive officer, Visa Inc.; John W. Stanton, chairman, Trilogy Equity Partners; and Padmasree Warrior, chief development officer and U.S. chief executive officer, NextEV. Nine of the 11 board members are independent of Microsoft, which is consistent with the requirement in the company’s governance guidelines that a substantial majority be independent.

Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world, and its mission is to empower every person and every organization on the planet to achieve more.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at the time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Media Relations Team or other appropriate contacts listed at http://news.microsoft.com/microsoft-public-relations-contacts.

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