Microsoft Corp.

Microsoft IPO

Microsoft Corporation went public with its initial public offering (IPO) on March 13, 1986.

The IPO was a significant milestone for the company, as it marked the transition from being a privately held company to a publicly traded one.

At the time, Microsoft’s IPO price was $21 per share, and the company raised approximately $61 million in capital.

Microsoft IPO Prospectus

A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. You can find Microsoft’s Prospectus here.

Company Overview & History

Microsoft is a multinational technology company headquartered in Redmond, Washington. It was founded by Bill Gates and Paul Allen on April 4, 1975.

The company has since grown to become one of the world’s largest and most influential technology companies.

Microsoft is known for its software products, including the Windows operating system, Office productivity suite, and Azure cloud computing platform.

Throughout its history, Microsoft has been a leader in the technology industry, driving innovation and shaping the way people interact with computers and software.

The company’s success can be attributed to its ability to adapt to changing market trends and deliver products that resonate with consumers and businesses alike.

Financial Performance

Year	Revenue($B)	Net Income($B)	EBITDA($B)	Operational Cash Flow($B)
2022	168.09	61.27	77.65	76.09
2021	153.28	44.28	69.93	60.67
2020	143.02	44.28	65.26	60.67
2019	125.84	39.24	58.92	52.22
2018	110.36	16.57	43.88	43.88
2017	96.57	21.20	36.77	39.51
2016	91.15	20.54	33.32	33.32
2015	93.58	12.19	29.02	29.02
2014	86.83	22.07	32.77	32.77
2013	77.85	21.86	30.80	28.84
2012	73.72	16.98	29.03	31.60
2011	69.94	23.15	28.76	26.89
2010	62.48	18.76	24.10	24.08
2009	58.44	14.57	20.36	19.02
2008	60.42	17.68	24.52	21.19
2007	51.12	14.07	19.47	17.66
2006	44.28	12.60	16.38	14.92
2005	39.79	12.25	14.49	13.16
2004	36.84	8.17	12.89	15.84
2003	32.19	7.53	11.20	13.58
2002	28.37	5.35	9.38	11.43
2001	25.30	7.34	9.01	10.41
2000	22.96	9.42	11.60	10.25

Business Model

Microsoft operates under a diversified business model, offering a wide range of products and services across multiple segments. The company’s primary business segments include:

• Productivity and Business Processes: This segment includes products such as Office 365, Office productivity suite, and LinkedIn. It focuses on providing tools and services that enhance productivity and collaboration in the workplace.

• Intelligent Cloud: Microsoft’s Intelligent Cloud segment encompasses products and services such as Azure, Windows Server, SQL Server, and Enterprise Services. This segment targets businesses and organizations, offering cloud computing solutions and enterprise-grade infrastructure.

• More Personal Computing: This segment includes Windows operating system, Xbox gaming console, Surface devices, and Bing search engine. It caters to consumers and focuses on delivering software, devices, and online services that enrich the personal computing experience.

Microsoft’s business model is centered around a combination of software licensing, cloud services subscriptions, hardware sales, and advertising revenue.

The company leverages its extensive ecosystem of products and services to generate revenue from various sources and maintain a competitive edge in the technology market.

Market Cap Over the Years

Year	Market Cap($B)
2022	2,222
2021	1,650
2020	1,620
2019	1,200
2018	825
2017	600
2016	450
2015	400
2014	315
2013	290

Risk Factors

As a prominent player in the technology industry, Microsoft faces several risk factors that could impact its business and financial performance. Some of the key risk factors include:

• Competitive Landscape: Microsoft operates in highly competitive markets, facing competition from both established technology companies and startups. Rival companies may develop innovative products or services that could disrupt Microsoft’s market position and impact its revenue.

• Rapid Technological Changes: The technology industry is characterized by rapid advancements and evolving customer preferences. Microsoft needs to continually innovate and adapt to emerging technologies, such as artificial intelligence, cloud computing, and mixed reality, to remain relevant and competitive.

• Data Security and Privacy: As a provider of software and cloud services, Microsoft must ensure the security and privacy of customer data. Any data breaches or privacy concerns could harm the company’s reputation and result in legal or regulatory consequences.

• Economic Conditions: Microsoft’s business performance is influenced by global economic conditions. Economic downturns, currency fluctuations, and geopolitical uncertainties can affect customer spending on technology products and services, impacting Microsoft’s revenue and profitability.

These risk factors should be carefully monitored as they can affect Microsoft’s business operations, financial results, and competitive position in the market.

Market Opportunity

Microsoft operates in a vast and ever-expanding market, with numerous opportunities for growth and innovation. Some of the key market opportunities for Microsoft include:

• Cloud Computing: The shift towards cloud computing presents a significant growth opportunity for Microsoft. The company’s Azure platform is a leading player in the cloud market, providing scalable infrastructure and a wide range of services to businesses of all sizes.

• Artificial Intelligence (AI): AI technologies are revolutionizing various industries, and Microsoft is well-positioned to capitalize on this opportunity. The company’s AI capabilities, integrated into its products and services, enable customers to leverage data-driven insights and automation for enhanced productivity and decision-making.

• Digital Transformation: Organizations worldwide are undergoing digital transformation to stay competitive in the digital age. Microsoft’s suite of productivity tools, cloud services, and development platforms empower businesses to embrace digital transformation and modernize their operations.

• Gaming and Entertainment: With its Xbox gaming platform and game development studios, Microsoft has a strong presence in the gaming and entertainment industry. The increasing popularity of gaming and the rise of streaming platforms provide opportunities for Microsoft to expand its gaming ecosystem and engage with a broad consumer base.

By capitalizing on these market opportunities and continuing to innovate across its product portfolio, Microsoft can sustain growth and maintain its position as a leader in the technology industry.

Competitors

• Apple Inc.
• Google LLC (Alphabet Inc.)
• Amazon.com, Inc.
• International Business Machines Corporation (IBM)
• Oracle Corporation
• Salesforce.com, Inc.
• SAP SE
• Intel Corporation

Key/Fun Company Facts

• Microsoft’s first product was the programming language interpreter BASIC, which was created for the Altair 8800 computer in 1975.
• The famous Windows operating system was first released in 1985 as Windows 1.0. Since then, Microsoft has launched numerous versions of Windows, with Windows 10 being the most recent major release.
• Microsoft is known for its philanthropic efforts. The company established the Bill & Melinda Gates Foundation in 2000, which focuses on global health, education, and poverty alleviation.
• In 2014, Microsoft acquired Mojang, the developer of the popular game Minecraft, for $2.5 billion. Minecraft has since become one of the best-selling video games of all time.
• Microsoft has a strong commitment to sustainability and has set ambitious environmental goals. The company aims to be carbon negative by 2030 and has plans to remove all the carbon it has emitted since its founding by 2050.