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Microsoft Corp, who attaches importance to the interests of shareholders, is still far from the market capitalization of trillion yuan?
Microsoft Corp announced the results for the first quarter of fiscal year 2019 in the early morning of October 25th Beijing time. First-quarter revenue was $29.08 billion, up 18.5% from $24.54 billion in the same period last year, while net profit was $8.82 billion, up 34.0% from $6.58 billion in the same period last year. The report card slightly exceeded the average expectation of $27.9 billion of 34 institutional analysts on Wall Street, so despite the sharp falls in the Nasdaq and Dow Jones indices in the US stock market in the early morning of the 25th, the good news changed Microsoft Corp's share price from a 5.35 per cent drop at the close to a 4.6 per cent rally immediately after the session.
(source: Futu Securities)
Overall, Microsoft Corp's annual revenue exceeded 100 billion US dollars for the first time in fiscal year 2018, a growth rate of 22.7%. Revenue growth in the first quarter of 2019 also maintained a high growth rate of 18.5%.This achievement comes from Microsoft Corp.CEONadella's overall success in controlling the strategic direction of the business is also Microsoft Corp as PCThe performance of high-speed growth companies in the era of monopoly emperors towards the mobile era.Since the 2013 fiscal year, Microsoft Corp's gross profit margin has not dropped by 60%, and the latest quarter has maintained the level of 65.94%, indicating that Microsoft Corp's overall operation is healthy, has a stable profit and cost control ability, which is reflected in the success of management.
The three major business gaps are narrowing: "Mobility first, Cloud first"
Born in the PC era, Microsoft Corp's Windows monopoly operating system, together with the chip overlord Intel Corp of the PC era, created the computer Wintel era, and the alliance of Microsoft Corp and Intel Corp jointly held the scepter of science and technology.However, after entering the era of mobile Internet, Microsoft Corp's several attempts are hardly successful, the most famous of which isWindows PhoneThe failure of. Apple Inc and Alphabet Inc-CL C have established the dominant position of the operating system in the mobile era.
But all this was reversed in the wise strategy of an Indian engineer.
In 2014, Microsoft Corp appointed Satya Nadella as the company's new CEO. At the beginning of taking office, Nadella defined the development strategy of "mobility first, cloud first".In keepingPcUnder the premise of product business, the company began to work with Apple Inc, Alphabet Inc-CL C, IBMAnd Salesforce.com Inc.And other "competitors" cooperation, focusing on the development of public cloud (Iaas)) and business cloud (saas、 paas) to foster a shift to an open source product culture and a subscription-based business model.As it turns out, the high growth of AZURE and OFFICE 365 is also a testament to the vision of CEO, who looks like an Indian prophet.
From the chart, we can clearly find that Microsoft Corp's productivity and business process income accounted for nearly half of the total revenue in fiscal year 2016, leaving the smart cloud business and personal computing business far behind.但2017-2019In the fiscal year, we can see that the gap between the three major businesses has significantly narrowed, and the annual income of the personal computing business is as high as 400.It is still growing despite the huge volume of US $100 million, which shows how fast and steady the growth of smart cloud business and personal computing business is.Judging from the 18.6% increase in smart cloud business in the first quarter of 2019 over the same period last year, and the 14.58% growth in personal computing business over the same period last year, we can see that these two business growth trends are still continuing.
Intelligent Cloud Business, AZUREThe advantage is obvious and the growth rate is unstoppable.
Intelligent cloud business is the main driver of Microsoft Corp's revenue growth, accounting for 29.45% of the total revenue in the first quarter. During the reporting period, the business revenue reached US $8.6 billion, an overall increase of 24%, which is the fastest among the three major revenue growth.Among themAzureThe cloud is the most dazzling part, and Microsoft Corp did not disclose the revenue it brings. According to EvercoreAnalysts estimate that Azure在201877.4 revenue generated in the fiscal yearBillion U.S. dollars, accounting for 7% of Microsoft Corp's total annual revenue.。
In terms of market share, according to Synergy research data in the public cloud, as of the first quarter of 2018 natural year leader Amazon.Com Inc accounted for about 40%, while the second Microsoft Corp accounted for about 14%. However, compared with Amazon.Com Inc AWS business income growth rate dropped to 40%, Microsoft Corp continued to maintain a relatively high growth rate.从2016Third in the fiscal yearStart of the quarter, 10 consecutiveFiscal quarter AZUREMaintain a growth rate of 90%Above the level. Although it fell to 76% in this quarterIs still much higher than AWS。
At present, the biggest advantage of the rapid development of AZURE business lies in the strategy with hybrid cloud as the core. Relying on the first-mover advantage and Capex scale effect, AWS hopes to establish a large and comprehensive scale barrier, which is basically similar to Ali Yun's domestic development strategy.On the other hand, Microsoft Corp stressed that starting from his own advantages,SPIIaas+Paas+Saas under the delivery modelThe one-stop service for large-scale enterprises is more satisfying for SPIThe integrity requirements of.
Productivity and business process business, leading position, steady and rising
The productivity and business process division had revenue of $9.871 billion in the quarter, up 19% from a year earlier and 18% at a fixed exchange rate, and operating profit was $3.881 billion, up from $3.006 billion a year earlier. In Microsoft Corp this business, still maintains the consistent strong leading edge.
Among them, revenue from office consumer products and cloud services increased by 16% year-on-year, and the number of office 365 consumer users continued to grow to 32.5 million. LinkedIn revenue rose 33 per cent year-on-year and the growth rate of the LinkedIn session reached a record 34 per cent. Dynamics 365 revenue growth of 51 per cent (49 per cent at fixed exchange rates) contributed to a 20 per cent increase in revenue from Dynamics products and cloud services.
Personal computing business, game development is gratifying
Personal computing income was $10.7 billion, up 15% from the same period last year, and gaming revenue growth was the brightest in this business. Let's take a closer look.
Game revenue increased by 44%. Revenue from Xbox software and services increased by 36%. The financial report said it was mainly due to the frequent occurrence of game masterpieces by third parties.Insert a tidbitXBOXThe number of global players of "PUBG" has exceeded 500.Ten thousand, and only at 3It was completed in six months, and the sales volume is quite amazing. In addition to eating chicken is generally loved by players, the most important thing is in XBOX.There will be no hanging up in the game.
Games have become second only to the cloud business in driving growth for two consecutive quarters, and the pulling force is growing. During the reporting period, Microsoft Corp's game revenue increased 44% to $2.7 billion. Xbox hardware sales are also doing well, with year-on-year growth of 94 per cent. Previously, game revenue was relatively low, mainly due to consumers waiting for the release of Xbox One X.
In October, Microsoft Corp just announced a xCloud game streaming service, which allows players to stream Xbox games on PC, smartphones and tablets. The service is expected to be open to public testing within 2019, and xCloud is bound to Microsoft Corp Azure Cloud.Nadella also said at the earnings conference that he would invest more in core content, communities and connections with cloud platforms in the future, which may help it stand out from its competitors.
Due to the 8% increase in OEM Pro revenue and the 3% increase in OEM revenue over the same period last year, the financial report showed that it mainly benefited from the package discount activity, resulting in an increase in the number of multi-year contracts. Revenue from Windows commercial products and cloud services grew 12%, and search advertising revenue excluding traffic acquisition costs rose 17%. Surface tablet revenue grew 14%, down slightly from the 25% growth rate in the previous quarter.
CNBC aboveAs for the display of the growth rate of various businesses, we can see that the revenue growth rate of Microsoft Corp's 11 segmented businesses was 2019.Achieved 9% in the first quarter of the fiscal yearItem growth rate of more than 10%，5The item exceeds 20%.，3Item over 30%Excellent grades.
Companies that attach importance to shareholders enjoy a premium
It has become a common practice for US stock companies, especially leading companies, to pay dividends four times a year, even if they cannot pay dividends every quarter, it is also a common practice to return shares to shareholders through buybacks when money is idle. Investors can accept that some companies that are in rapid growth, have relatively large capital expenditure or can maintain ultra-high ROE for a long time can accept that they will not pay dividends for the time being. But once the conditions for dividends are in place, it still depends on companies that do not pay dividends, and investors and institutions often reward their weak share price performance.
From Microsoft Corp in the past 4In the last fiscal year, a total of 468.9 was spent.100 million US dollars of real money to buy back shares, and another 463.54To pay dividends to shareholders, the latest quarterly results show that 37.44 in the past three months100 million buybacks and 32.2The dividend of 100 million yuan increased by 45.68% respectively over the same period.和7%. The generous performance made shareholders feel that this is a responsible listed company.
Microsoft Corp is not the only tech giant to give cash back to shareholders by buying back shares. Similarly, there are large-scale buybacks in recent years, such as Apple Inc, Alphabet Inc-CL C and other giants. Just look at the data of fiscal year 2017: Apple Inc buys back about 33 billion US dollars and Alphabet Inc-CL C buys back about 4.8 billion US dollars, both of which are generous. Similarly, from the stock price point of view, these companies have also won the favor of investors and maintained an excellent upward trend.
(source: Futu Securities, Pink: Facebook Inc, Green: Apple Inc, Orange: Amazon.Com Inc, main Line: Microsoft Corp)
Of course, there is also an ungenerous company out of the excellent stock price performance, that is Amazon.Com Inc. Buffett talked about a theory that the value of a company needs to be evaluated before buying, and the measure of value is the discounted future cash flow, that is, growth. The past 20Amazon.Com Inc made a long-term loss in the traditional accounting sense, but in terms of cash flow, he was creating value at a high speed.
However, Microsoft Corp, which takes into account the interests of shareholders and rapid growth, will be the more preferred choice for investors among the head technology companies in US stocks, from 2017.Since 2000, the figure above is 4.Home technology stocks, Microsoft Corp share price climbing volatility is also the least. Although the U. S. stock market has adjusted recently, the stock market has been a weighing machine for a long time. There is reason to be optimistic that Microsoft Corp will improve in the long-term stability and move towards a market capitalization of one trillion yuan.
(courtesy of Hua Guang / Charlie)