Document and Entity Information
Document and Entity Information - USD ($) $ / shares in Units, $ in Trillions | 12 Months Ended | ||
Jun. 30, 2023 | Jul. 24, 2023 | Dec. 31, 2022 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | MICROSOFT CORPORATION | ||
Entity Central Index Key | 0000789019 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity File Number | 001-37845 | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 91-1144442 | ||
Entity Address, Address Line One | ONE MICROSOFT WAY | ||
Entity Address, City or Town | REDMOND | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98052-6399 | ||
City Area Code | 425 | ||
Local Phone Number | 882-8080 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Common Stock, Shares Outstanding | 7,429,763,722 | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Public Float | $ 1.8 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Common Stock, Par Value Per Share | $ 0.00000625 | ||
Auditor Name | DELOITTE & TOUCHE LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Seattle, Washington | ||
Documents Incorporated by Reference | Portions of the definitive Proxy Statement to be delivered to shareholders in connection with the Annual Meeting of Shareholders to be held on December 7, 2023 are incorporated by reference into Part III. | ||
Common Stock | |||
Entity Information [Line Items] | |||
Trading Symbol | MSFT | ||
Title of 12(b) Security | Common stock, $0.00000625 par value per share | ||
Security Exchange Name | NASDAQ | ||
3.125% Notes Due 2028 | |||
Entity Information [Line Items] | |||
Trading Symbol | MSFT | ||
Title of 12(b) Security | 3.125% Notes due 2028 | ||
Security Exchange Name | NASDAQ | ||
2.625% Notes Due 2033 | |||
Entity Information [Line Items] | |||
Trading Symbol | MSFT | ||
Title of 12(b) Security | 2.625% Notes due 2033 | ||
Security Exchange Name | NASDAQ |
INCOME STATEMENTS
INCOME STATEMENTS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue | $ 211,915 | $ 198,270 | $ 168,088 |
Cost of revenue | 65,863 | 62,650 | 52,232 |
Gross margin | 146,052 | 135,620 | 115,856 |
Research and development | 27,195 | 24,512 | 20,716 |
Sales and marketing | 22,759 | 21,825 | 20,117 |
General and administrative | 7,575 | 5,900 | 5,107 |
Operating income | 88,523 | 83,383 | 69,916 |
Other income, net | 788 | 333 | 1,186 |
Income before income taxes | 89,311 | 83,716 | 71,102 |
Provision for income taxes | 16,950 | 10,978 | 9,831 |
Net income | $ 72,361 | $ 72,738 | $ 61,271 |
Earnings per share: | |||
Basic | $ 9.72 | $ 9.70 | $ 8.12 |
Diluted | $ 9.68 | $ 9.65 | $ 8.05 |
Weighted average shares outstanding: | |||
Basic | 7,446 | 7,496 | 7,547 |
Diluted | 7,472 | 7,540 | 7,608 |
Product | |||
Revenue | $ 64,699 | $ 72,732 | $ 71,074 |
Cost of revenue | 17,804 | 19,064 | 18,219 |
Service and Other | |||
Revenue | 147,216 | 125,538 | 97,014 |
Cost of revenue | $ 48,059 | $ 43,586 | $ 34,013 |
COMPREHENSIVE INCOME STATEMENTS
COMPREHENSIVE INCOME STATEMENTS - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 72,361 | $ 72,738 | $ 61,271 |
Other comprehensive income (loss), net of tax: | |||
Net change related to derivatives | (14) | 6 | 19 |
Net change related to investments | (1,444) | (5,360) | (2,266) |
Translation adjustments and other | (207) | (1,146) | 873 |
Other comprehensive loss | (1,665) | (6,500) | (1,374) |
Comprehensive income | $ 70,696 | $ 66,238 | $ 59,897 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 34,704 | $ 13,931 |
Short-term investments | 76,558 | 90,826 |
Total cash, cash equivalents, and short-term investments | 111,262 | 104,757 |
Accounts receivable, net of allowance for doubtful accounts of $650 and $633 | 48,688 | 44,261 |
Inventories | 2,500 | 3,742 |
Other current assets | 21,807 | 16,924 |
Total current assets | 184,257 | 169,684 |
Property and equipment, net of accumulated depreciation of $68,251 and $59,660 | 95,641 | 74,398 |
Operating lease right-of-use assets | 14,346 | 13,148 |
Equity investments | 9,879 | 6,891 |
Goodwill | 67,886 | 67,524 |
Intangible assets, net | 9,366 | 11,298 |
Other long-term assets | 30,601 | 21,897 |
Total assets | 411,976 | 364,840 |
Current liabilities: | ||
Accounts payable | 18,095 | 19,000 |
Current portion of long-term debt | 5,247 | 2,749 |
Accrued compensation | 11,009 | 10,661 |
Short-term income taxes | 4,152 | 4,067 |
Short-term unearned revenue | 50,901 | 45,538 |
Other current liabilities | 14,745 | 13,067 |
Total current liabilities | 104,149 | 95,082 |
Long-term debt | 41,990 | 47,032 |
Long-term income taxes | 25,560 | 26,069 |
Long-term unearned revenue | 2,912 | 2,870 |
Deferred income taxes | 433 | 230 |
Operating lease liabilities | 12,728 | 11,489 |
Other long-term liabilities | 17,981 | 15,526 |
Total liabilities | 205,753 | 198,298 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock and paid-in capital - shares authorized 24,000; outstanding 7,432 and 7,464 | 93,718 | 86,939 |
Retained earnings | 118,848 | 84,281 |
Accumulated other comprehensive loss | (6,343) | (4,678) |
Total stockholders’ equity | 206,223 | 166,542 |
Total liabilities and stockholders’ equity | $ 411,976 | $ 364,840 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 650 | $ 633 |
Property and equipment, accumulated depreciation | $ 68,251 | $ 59,660 |
Common stock, shares authorized | 24,000,000,000 | 24,000,000,000 |
Common stock, outstanding | 7,432,000,000 | 7,464,000,000 |
CASH FLOWS STATEMENTS
CASH FLOWS STATEMENTS - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Operations | |||
Net income | $ 72,361 | $ 72,738 | $ 61,271 |
Adjustments to reconcile net income to net cash from operations: | |||
Depreciation, amortization, and other | 13,861 | 14,460 | 11,686 |
Stock-based compensation expense | 9,611 | 7,502 | 6,118 |
Net recognized losses (gains) on investments and derivatives | 196 | (409) | (1,249) |
Deferred income taxes | (6,059) | (5,702) | (150) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,087) | (6,834) | (6,481) |
Inventories | 1,242 | (1,123) | (737) |
Other current assets | (1,991) | (709) | (932) |
Other long-term assets | (2,833) | (2,805) | (3,459) |
Accounts payable | (2,721) | 2,943 | 2,798 |
Unearned revenue | 5,535 | 5,109 | 4,633 |
Income taxes | (358) | 696 | (2,309) |
Other current liabilities | 2,272 | 2,344 | 4,149 |
Other long-term liabilities | 553 | 825 | 1,402 |
Net cash from operations | 87,582 | 89,035 | 76,740 |
Financing | |||
Cash premium on debt exchange | 0 | 0 | (1,754) |
Repayments of debt | (2,750) | (9,023) | (3,750) |
Common stock issued | 1,866 | 1,841 | 1,693 |
Common stock repurchased | (22,245) | (32,696) | (27,385) |
Common stock cash dividends paid | (19,800) | (18,135) | (16,521) |
Other, net | (1,006) | (863) | (769) |
Net cash used in financing | (43,935) | (58,876) | (48,486) |
Investing | |||
Additions to property and equipment | (28,107) | (23,886) | (20,622) |
Acquisition of companies, net of cash acquired, and purchases of intangible and other assets | (1,670) | (22,038) | (8,909) |
Purchases of investments | (37,651) | (26,456) | (62,924) |
Maturities of investments | 33,510 | 16,451 | 51,792 |
Sales of investments | 14,354 | 28,443 | 14,008 |
Other, net | (3,116) | (2,825) | (922) |
Net cash used in investing | (22,680) | (30,311) | (27,577) |
Effect of foreign exchange rates on cash and cash equivalents | (194) | (141) | (29) |
Net change in cash and cash equivalents | 20,773 | (293) | 648 |
Cash and cash equivalents, beginning of period | 13,931 | 14,224 | 13,576 |
Cash and cash equivalents, end of period | $ 34,704 | $ 13,931 | $ 14,224 |
STOCKHOLDERS' EQUITY STATEMENTS
STOCKHOLDERS' EQUITY STATEMENTS - USD ($) $ in Millions | Total | Common stock and paid-in capital | Retained earnings | Retained earnings Cumulative effect of accounting changes | Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss) Cumulative effect of accounting changes |
Balance, beginning of period at Jun. 30, 2020 | $ 80,552 | $ 34,566 | $ (32) | $ 3,186 | $ 10 | |
Common stock issued | 1,963 | |||||
Net income | $ 61,271 | 61,271 | ||||
Other comprehensive loss | (1,374) | (1,374) | ||||
Common stock cash dividends | (16,871) | |||||
Common stock repurchased | (5,539) | (21,879) | ||||
Stock-based compensation expense | 6,118 | |||||
Other, net | 17 | |||||
Balance, end of period at Jun. 30, 2021 | $ 141,988 | 83,111 | 57,055 | 0 | 1,822 | 0 |
Cash dividends declared per common share | $ 2.24 | |||||
Common stock issued | 1,841 | |||||
Net income | $ 72,738 | 72,738 | ||||
Other comprehensive loss | (6,500) | (6,500) | ||||
Common stock cash dividends | (18,550) | (18,552) | ||||
Common stock repurchased | (5,688) | (26,960) | ||||
Stock-based compensation expense | 7,502 | |||||
Other, net | 173 | |||||
Balance, end of period at Jun. 30, 2022 | $ 166,542 | 86,939 | 84,281 | $ 0 | (4,678) | $ 0 |
Cash dividends declared per common share | $ 2.48 | |||||
Common stock issued | 1,866 | |||||
Net income | $ 72,361 | 72,361 | ||||
Other comprehensive loss | (1,665) | (1,665) | ||||
Common stock cash dividends | (20,233) | (20,226) | ||||
Common stock repurchased | (4,696) | (17,568) | ||||
Stock-based compensation expense | 9,611 | |||||
Other, net | (2) | |||||
Balance, end of period at Jun. 30, 2023 | $ 206,223 | $ 93,718 | $ 118,848 | $ (6,343) | ||
Cash dividends declared per common share | $ 2.72 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 72,361 | $ 72,738 | $ 61,271 |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE 1 — ACCOUNTING POLICIES Accounting Principles Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We have recast certain prior period amounts to conform to the current period presentation. The recast of these prior period amounts had no impact on our consolidated balance sheets, consolidated income statements, or consolidated cash flows statements. Principles of Consolidation The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; stock-based compensation forfeiture rates; when technological feasibility is achieved for our products; the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns; and determining the timing and amount of impairments for investments. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. In July 2022, we completed an assessment of the useful lives of our server and network equipment. Due to investments in software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology, we determined we should increase the estimated useful lives of both server and network equipment from four years to six years . This change in accounting estimate was effective beginning fiscal year 2023. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2022, the effect of this change in estimate for fiscal year 2023 was an increase in operating income of $ 3.7 billion and net income of $ 3.0 billion, or $ 0.40 per both basic and diluted share. Foreign Currencies Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income. Revenue Product Revenue and Service and Other Revenue Product revenue includes sales from operating systems, cross-device productivity and collaboration applications, server applications, business solution applications, desktop and server management tools, software development tools, video games, and hardware such as PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. Service and other revenue includes sales from cloud-based solutions that provide customers with software, services, platforms, and content such as Office 365, Azure, Dynamics 365, and Xbox; solution support; and consulting services. Service and other revenue also includes sales from online advertising and LinkedIn. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. In cases where we allocate revenue to software updates, primarily because the updates are provided at no additional charge, revenue is recognized as the updates are provided, which is generally ratably over the estimated life of the related device or license. Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (“SA”). SA conveys rights to new software and upgrades released over the contract period and provides support, tools, and training to help customers deploy and use products more efficiently. On-premises licenses are considered distinct performance obligations when sold with SA. Revenue allocated to SA is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that SA comprises distinct performance obligations that are satisfied over time. Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on either a subscription or consumption basis. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period. Revenue related to cloud services provided on a consumption basis, such as the amount of storage used in a period, is recognized based on the customer utilization of such resources. When cloud services require a significant level of integration and interdependency with software and the individual components are not considered distinct, all revenue is recognized over the period in which the cloud services are provided. Revenue from search advertising is recognized when the advertisement appears in the search results or when the action necessary to earn the revenue has been completed. Revenue from consulting services is recognized as services are provided. Our hardware is generally highly dependent on, and interrelated with, the underlying operating system and cannot function without the operating system. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to resellers or directly to end customers through retail stores and online marketplaces. Refer to Note 19 – Segment Information and Geographic Data for further information, including revenue by significant product and service offering. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. When a cloud-based service includes both on-premises software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Certain cloud services, primarily Office 365, depend on a significant level of integration, interdependency, and interrelation between the desktop applications and cloud services, and are accounted for together as one performance obligation. Revenue from Office 365 is recognized ratably over the period in which the cloud services are provided. Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately, including on-premises licenses sold with SA or software updates provided at no additional charge. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. Due to the various benefits from and the nature of our SA program, judgment is required to assess the pattern of delivery, including the exercise pattern of certain benefits across our portfolio of customers. Our products are generally sold with a right of return, we may provide other credits or incentives, and in certain instances we estimate customer usage of our products and services, which are accounted for as variable consideration when determining the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Changes to our estimated variable consideration were not material for the periods presented. Contract Balances and Other Receivables Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record a receivable related to revenue recognized for multi-year on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. Unearned revenue comprises mainly unearned revenue related to volume licensing programs, which may include SA and cloud services. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Unearned revenue also includes payments for consulting services to be performed in the future, LinkedIn subscriptions, Office 365 subscriptions, Xbox subscriptions, Windows post-delivery support, Dynamics business solutions, and other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. Refer to Note 13 – Unearned Revenue for further information, including unearned revenue by segment and changes in unearned revenue during the period. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year on-premises licenses that are invoiced annually with revenue recognized upfront. As of June 30, 2023 and 2022, long-term accounts receivable, net of allowance for doubtful accounts, was $ 4.5 billion and $ 3.8 billion, respectively, and is included in other long-term assets in our consolidated balance sheets. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. Activity in the allowance for doubtful accounts was as follows: (In millions) Year Ended June 30, 2023 2022 2021 Balance, beginning of period $ 710 $ 798 $ 816 Charged to costs and other 258 157 234 Write-offs ( 252 ) ( 245 ) ( 252 ) Balance, end of period $ 716 $ 710 $ 798 Allowance for doubtful accounts included in our consolidated balance sheets: (In millions) June 30, 2023 2022 2021 Accounts receivable, net of allowance for doubtful accounts $ 650 $ 633 $ 751 Other long-term assets 66 77 47 Total $ 716 $ 710 $ 798 As of June 30, 2023 and 2022, other receivables related to activities to facilitate the purchase of server components were $ 9.2 billion and $ 6.1 billion, respectively, and are included in other current assets in our consolidated balance sheets. We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. As of June 30, 2023 and 2022, our financing receivables, net were $ 5.3 billion and $ 4.1 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. We record an allowance to cover expected losses based on troubled accounts, historical experience, and other currently available evidence. Assets Recognized from Costs to Obtain a Contract with a Customer We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets in our consolidated balance sheets. We apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include our internal sales organization compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. Cost of Revenue Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by original equipment manufacturers (“OEM”), to drive traffic to our websites, and to acquire online advertising space; costs incurred to support and maintain cloud-based and other online products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Capitalized software development costs are amortized over the estimated lives of the products. Product Warranty We provide for the estimated costs of fulfilling our obligations under hardware and software warranties at the time the related revenue is recognized. For hardware warranties, we estimate the costs based on historical and projected product failure rates, historical and projected repair costs, and knowledge of specific product failures (if any). The specific hardware warranty terms and conditions vary depending upon the product sold and the country in which we do business, but generally include parts and labor over a period generally ranging from 90 days to three years. For software warranties, we estimate the costs to provide bug fixes, such as security patches, over the estimated life of the software. We regularly reevaluate our estimates to assess the adequacy of the recorded warranty liabilities and adjust the amounts as necessary. Research and Development Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software products, is generally shortly before the products are released to production. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products. Sales and Marketing Sales and marketing expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with sales and marketing personnel, and the costs of advertising, promotions, trade shows, seminars, and other programs. Advertising costs are expensed as incurred. Advertising expense was $ 904 million , $ 1.5 billion, and $ 1.5 billion in fiscal years 2023, 2022, and 2021, respectively. Stock-Based Compensation Compensation cost for stock awards, which include restricted stock units (“RSUs”) and performance stock units (“PSUs”), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. The fair value of stock awards is based on the quoted price of our common stock on the grant date less the present value of expected dividends not received during the vesting period. We measure the fair value of PSUs using a Monte Carlo valuation model. Compensation cost for RSUs is recognized using the straight-line method and for PSUs is recognized using the accelerated method. Compensation expense for the employee stock purchase plan (“ESPP”) is measured as the discount the employee is entitled to upon purchase and is recognized in the period of purchase. Employee Severance On January 18, 2023, we announced a decision to reduce our overall workforce by approximately 10,000 jobs through the third quarter of fiscal year 2023. During the three months ended December 31, 2022, we recorded $ 800 million of employee severance expenses related to these job eliminations as part of an ongoing employee benefit plan. These employee severance expenses were incurred as part of a corporate program, and were included in general and administrative expenses in our consolidated income statements and allocated to our segments based on relative gross margin. Refer to Note 19 – Segment Information and Geographic Data for further information. Income Taxes Income tax expense includes U.S. and international income taxes, and interest and penalties on uncertain tax positions. Certain income and expenses are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are reported net of a valuation allowance when it is more likely than not that a tax benefit will not be realized. All deferred income taxes are classified as long-term in our consolidated balance sheets. Financial Instruments Investments We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income. Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net. Derivatives Derivative instruments are recognized as either assets or liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in other income (expense), net with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net. Fair Value Measurements We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. Our Level 1 investments include U.S. government securities, common and preferred stock, and mutual funds. Our Level 1 derivative assets and liabilities include those actively traded on exchanges. • Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Our Level 2 investments include commercial paper, certificates of deposit, U.S. agency securities, foreign government bonds, mortgage- and asset-backed securities, corporate notes and bonds, and municipal securities. Our Level 2 derivative assets and liabilities include certain cleared swap contracts and over-the-counter forward, option, and swap contracts. • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in corporate notes and bonds, municipal securities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. We measure equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. Inventories Inventories are stated at average cost, subject to the lower of cost or net realizable value. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. Net realizable value is the estimated selling price less estimated costs of completion, disposal, and transportation. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue. Property and Equipment Property and equipment is stated at cost less accumulated depreciation, and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: computer software developed or acquired for internal use, three years ; computer equipment, two to six years ; buildings and improvements, five to 15 years ; leasehold improvements, three to 20 years ; and furniture and equipment, one to 10 years . Land is not depreciated. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. Goodwill Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (May 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Intangible Assets Our intangible assets are subject to amortization and are amortized using the straight-line method over their estimated period of benefit, ranging from one to 20 years . We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 2 — EARNINGS PER SHARE Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards. The components of basic and diluted EPS were as follows: (In millions, except earnings per share) Year Ended June 30, 2023 2022 2021 Net income available for common shareholders (A) $ 72,361 $ 72,738 $ 61,271 Weighted average outstanding shares of common stock (B) 7,446 7,496 7,547 Dilutive effect of stock-based awards 26 44 61 Common stock and common stock equivalents (C) 7,472 7,540 7,608 Earnings Per Share Basic (A/B) $ 9.72 $ 9.70 $ 8.12 Diluted (A/C) $ 9.68 $ 9.65 $ 8.05 Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented. |
OTHER INCOME (EXPENSE), NET
OTHER INCOME (EXPENSE), NET | 12 Months Ended |
Jun. 30, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER INCOME (EXPENSE), NET | NOTE 3 — OTHER INCOME (EXPENSE), NET The components of other income (expense), net were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Interest and dividends income $ 2,994 $ 2,094 $ 2,131 Interest expense ( 1,968 ) ( 2,063 ) ( 2,346 ) Net recognized gains on investments 260 461 1,232 Net gains (losses) on derivatives ( 456 ) ( 52 ) 17 Net gains (losses) on foreign currency remeasurements 181 ( 75 ) 54 Other, net ( 223 ) ( 32 ) 98 Total $ 788 $ 333 $ 1,186 Net Recognized Gains (Losses) on Investments Net recognized gains (losses) on debt investments were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Realized gains from sales of available-for-sale securities $ 36 $ 162 $ 105 Realized losses from sales of available-for-sale securities ( 124 ) ( 138 ) ( 40 ) Impairments and allowance for credit losses ( 10 ) ( 81 ) ( 2 ) Total $ ( 98 ) $ ( 57 ) $ 63 Net recognized gains (losses) on equity investments were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Net realized gains on investments sold $ 75 $ 29 $ 123 Net unrealized gains on investments still held 303 509 1,057 Impairments of investments ( 20 ) ( 20 ) ( 11 ) Total $ 358 $ 518 $ 1,169 |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | NOTE 4 — INVESTMENTS Investment Components The components of investments were as follows: (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2023 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 16,589 $ 0 $ 0 $ 16,589 $ 12,231 $ 4,358 $ 0 Certificates of deposit Level 2 2,701 0 0 2,701 2,657 44 0 U.S. government securities Level 1 65,237 2 ( 3,870 ) 61,369 2,991 58,378 0 U.S. agency securities Level 2 2,703 0 0 2,703 894 1,809 0 Foreign government bonds Level 2 498 1 ( 24 ) 475 0 475 0 Mortgage- and asset-backed securities Level 2 824 1 ( 39 ) 786 0 786 0 Corporate notes and bonds Level 2 10,809 8 ( 583 ) 10,234 0 10,234 0 Corporate notes and bonds Level 3 120 0 0 120 0 120 0 Municipal securities Level 2 285 1 ( 18 ) 268 7 261 0 Municipal securities Level 3 103 0 ( 16 ) 87 0 87 0 Total debt investments $ 99,869 $ 13 $ ( 4,550 ) $ 95,332 $ 18,780 $ 76,552 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 10,138 $ 7,446 $ 0 $ 2,692 Equity investments Other 7,187 0 0 7,187 Total equity investments $ 17,325 $ 7,446 $ 0 $ 9,879 Cash $ 8,478 $ 8,478 $ 0 $ 0 Derivatives, net (a) 6 0 6 0 Total $ 121,141 $ 34,704 $ 76,558 $ 9,879 (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2022 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 2,500 $ 0 $ 0 $ 2,500 $ 2,498 $ 2 $ 0 Certificates of deposit Level 2 2,071 0 0 2,071 2,032 39 0 U.S. government securities Level 1 79,696 29 ( 2,178 ) 77,547 9 77,538 0 U.S. agency securities Level 2 419 0 ( 9 ) 410 0 410 0 Foreign government bonds Level 2 506 0 ( 24 ) 482 0 482 0 Mortgage- and asset-backed securities Level 2 727 1 ( 30 ) 698 0 698 0 Corporate notes and bonds Level 2 11,661 4 ( 554 ) 11,111 0 11,111 0 Corporate notes and bonds Level 3 67 0 0 67 0 67 0 Municipal securities Level 2 368 19 ( 13 ) 374 0 374 0 Municipal securities Level 3 103 0 ( 6 ) 97 0 97 0 Total debt investments $ 98,118 $ 53 $ ( 2,814 ) $ 95,357 $ 4,539 $ 90,818 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,590 $ 1,134 $ 0 $ 456 Equity investments Other 6,435 0 0 6,435 Total equity investments $ 8,025 $ 1,134 $ 0 $ 6,891 Cash $ 8,258 $ 8,258 $ 0 $ 0 Derivatives, net (a) 8 0 8 0 Total $ 111,648 $ 13,931 $ 90,826 $ 6,891 (a) Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. Equity investments presented as “Other” in the tables above include investments without readily determinable fair values measured using the equity method or measured at cost with adjustments for observable changes in price or impairments, and investments measured at fair value using net asset value as a practical expedient which are not categorized in the fair value hierarchy. As of June 30, 2023 and 2022, equity investments without readily determinable fair values measured at cost with adjustments for observable changes in price or impairments were $ 4.2 billion and $ 3.8 billion, respectively. Unrealized Losses on Debt Investments Debt investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows: Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2023 U.S. government and agency securities $ 7,950 $ ( 336 ) $ 45,273 $ ( 3,534 ) $ 53,223 $ ( 3,870 ) Foreign government bonds 77 ( 5 ) 391 ( 19 ) 468 ( 24 ) Mortgage- and asset-backed securities 257 ( 5 ) 412 ( 34 ) 669 ( 39 ) Corporate notes and bonds 2,326 ( 49 ) 7,336 ( 534 ) 9,662 ( 583 ) Municipal securities 111 ( 3 ) 186 ( 31 ) 297 ( 34 ) Total $ 10,721 $ ( 398 ) $ 53,598 $ ( 4,152 ) $ 64,319 $ ( 4,550 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2022 U.S. government and agency securities $ 59,092 $ ( 1,835 ) $ 2,210 $ ( 352 ) $ 61,302 $ ( 2,187 ) Foreign government bonds 418 ( 18 ) 27 ( 6 ) 445 ( 24 ) Mortgage- and asset-backed securities 510 ( 26 ) 41 ( 4 ) 551 ( 30 ) Corporate notes and bonds 9,443 ( 477 ) 786 ( 77 ) 10,229 ( 554 ) Municipal securities 178 ( 12 ) 74 ( 7 ) 252 ( 19 ) Total $ 69,641 $ ( 2,368 ) $ 3,138 $ ( 446 ) $ 72,779 $ ( 2,814 ) Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Management does not believe any remaining unrealized losses represent impairments based on our evaluation of available evidence. Debt Investment Maturities (In millions) Adjusted Cost Basis Estimated Fair Value June 30, 2023 Due in one year or less $ 38,182 $ 38,048 Due after one year through five years 47,127 44,490 Due after five years through 10 years 13,262 11,628 Due after 10 years 1,298 1,166 Total $ 99,869 $ 95,332 |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | NOTE 5 — DERIVATIVES We use derivative instruments to manage risks related to foreign currencies, interest rates, equity prices, and credit; to enhance investment returns; and to facilitate portfolio diversification. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of these exposures as effectively as possible. Our derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment. Foreign Currencies Certain forecasted transactions, assets, and liabilities are exposed to foreign currency risk. We monitor our foreign currency exposures daily to maximize the economic effectiveness of our foreign currency hedge positions. Foreign currency risks related to certain non-U.S. dollar-denominated investments are hedged using foreign exchange forward contracts that are designated as fair value hedging instruments. Foreign currency risks related to certain Euro-denominated debt are hedged using foreign exchange forward contracts that are designated as cash flow hedging instruments. Certain options and forwards not designated as hedging instruments are also used to manage the variability in foreign exchange rates on certain balance sheet amounts and to manage other foreign currency exposures. Interest Rate Interest rate risks related to certain fixed-rate debt are hedged using interest rate swaps that are designated as fair value hedging instruments to effectively convert the fixed interest rates to floating interest rates. Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. We manage the average maturity of our fixed-income portfolio to achieve economic returns that correlate to certain broad-based fixed-income indices using option, futures, and swap contracts. These contracts are not designated as hedging instruments and are included in “Other contracts” in the tables below. Equity Securities held in our equity investments portfolio are subject to market price risk. At times, we may hold options, futures, and swap contracts. These contracts are not designated as hedging instruments. Credit Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. We use credit default swap contracts to manage credit exposures relative to broad-based indices and to facilitate portfolio diversification. These contracts are not designated as hedging instruments and are included in “Other contracts” in the tables below. Credit-Risk-Related Contingent Features Certain of our counterparty agreements for derivative instruments contain provisions that require our issued and outstanding long-term unsecured debt to maintain an investment grade credit rating and require us to maintain minimum liquidity of $ 1.0 billion. To the extent we fail to meet these requirements, we will be required to post collateral, similar to the standard convention related to over-the-counter derivatives. As of June 30, 2023, our long-term unsecured debt rating was AAA , and cash investments were in excess of $ 1.0 billion. As a result, no collateral was required to be posted. The following table presents the notional amounts of our outstanding derivative instruments measured in U.S. dollar equivalents: (In millions) June 30, 2023 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts purchased $ 1,492 $ 635 Interest rate contracts purchased 1,078 1,139 Not Designated as Hedging Instruments Foreign exchange contracts purchased 7,874 10,322 Foreign exchange contracts sold 25,159 21,606 Equity contracts purchased 3,867 1,131 Equity contracts sold 2,154 0 Other contracts purchased 1,224 1,642 Other contracts sold 581 544 Fair Values of Derivative Instruments The following table presents our derivative instruments: (In millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities June 30, 2023 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts $ 34 $ ( 67 ) $ 0 $ ( 77 ) Interest rate contracts 16 0 3 0 Not Designated as Hedging Instruments Foreign exchange contracts 249 ( 332 ) 333 ( 362 ) Equity contracts 165 ( 400 ) 5 ( 95 ) Other contracts 5 ( 6 ) 15 ( 17 ) Gross amounts of derivatives 469 ( 805 ) 356 ( 551 ) Gross amounts of derivatives offset in the balance sheet ( 202 ) 206 ( 130 ) 133 Cash collateral received 0 ( 125 ) 0 ( 75 ) Net amounts of derivatives $ 267 $ ( 724 ) $ 226 $ ( 493 ) Reported as Short-term investments $ 6 $ 0 $ 8 $ 0 Other current assets 245 0 218 0 Other long-term assets 16 0 0 0 Other current liabilities 0 ( 341 ) 0 ( 298 ) Other long-term liabilities 0 ( 383 ) 0 ( 195 ) Total $ 267 $ ( 724 ) $ 226 $ ( 493 ) Gross derivative assets and liabilities subject to legally enforceable master netting agreements for which we have elected to offset were $ 442 million and $ 804 million, respectively, as of June 30, 2023, and $ 343 million and $ 550 million, respectively, as of June 30, 2022. The following table presents the fair value of our derivatives instruments on a gross basis: (In millions) Level 1 Level 2 Level 3 Total June 30, 2023 Derivative assets $ 0 $ 462 $ 7 $ 469 Derivative liabilities 0 ( 805 ) 0 ( 805 ) June 30, 2022 Derivative assets 1 349 6 356 Derivative liabilities 0 ( 551 ) 0 ( 551 ) Gains (losses) on derivative instruments recognized in other income (expense), net were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Designated as Fair Value Hedging Instruments Foreign exchange contracts Derivatives $ 0 $ 49 $ 193 Hedged items 0 ( 50 ) ( 188 ) Excluded from effectiveness assessment 0 4 30 Interest rate contracts Derivatives ( 65 ) ( 92 ) ( 37 ) Hedged items 38 108 53 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Amount reclassified from accumulated other comprehensive income 61 ( 79 ) 17 Not Designated as Hedging Instruments Foreign exchange contracts ( 73 ) 383 27 Equity contracts ( 420 ) 13 ( 6 ) Other contracts ( 41 ) ( 85 ) 15 Gains (losses), net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Included in effectiveness assessment $ 34 $ ( 57 ) $ 34 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 6 — INVENTORIES The components of inventories were as follows: (In millions) June 30, 2023 2022 Raw materials $ 709 $ 1,144 Work in process 23 82 Finished goods 1,768 2,516 Total $ 2,500 $ 3,742 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 — PROPERTY AND EQUIPMENT The components of property and equipment were as follows: (In millions) June 30, 2023 2022 Land $ 5,683 $ 4,734 Buildings and improvements 68,465 55,014 Leasehold improvements 8,537 7,819 Computer equipment and software 74,961 60,631 Furniture and equipment 6,246 5,860 Total, at cost 163,892 134,058 Accumulated depreciation ( 68,251 ) ( 59,660 ) Total, net $ 95,641 $ 74,398 During fiscal years 2023, 2022, and 2021, depreciation expense was $ 11.0 billion, $ 12.6 billion, and $ 9.3 billion, respectively. Depreciation expense declined in fiscal year 2023 due to the change in estimated useful lives of our server and network equipment. As of June 30, 2023, we have committed $ 13.5 billion for the construction of new buildings, building improvements, and leasehold improvements, primarily related to datacenters. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 12 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 8 — BUSINESS COMBINATIONS Nuance Communications, Inc. On March 4, 2022 , we completed our acquisition of Nuance Communications, Inc. (“Nuance”) for a total purchase price of $ 18.8 billion, consisting primarily of cash. Nuance is a cloud and artificial intelligence (“AI”) software provider with healthcare and enterprise AI experience, and the acquisition will build on our industry-specific cloud offerings. The financial results of Nuance have been included in our consolidated financial statements since the date of the acquisition. Nuance is reported as part of our Intelligent Cloud segment. The allocation of the purchase price to goodwill was completed as of December 31, 2022. The major classes of assets and liabilities to which we have allocated the purchase price were as follows: (In millions) Goodwill (a) $ 16,326 Intangible assets 4,365 Other assets 42 Other liabilities (b) ( 1,972 ) Total $ 18,761 (a) Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to increased synergies that are expected to be achieved from the integration of Nuance. None of the goodwill is expected to be deductible for income tax purposes. (b) Includes $ 986 million of convertible senior notes issued by Nuance in 2015 and 2017, substantially all of which have been redeemed. Following are the details of the purchase price allocated to the intangible assets acquired: (In millions, except average life) Amount Weighted Average Life Customer-related $ 2,610 9 years Technology-based 1,540 5 years Marketing-related 215 4 years Total $ 4,365 7 years ZeniMax Media Inc. On March 9, 2021 , we completed our acquisition of ZeniMax Media Inc. (“ZeniMax”), the parent company of Bethesda Softworks LLC (“Bethesda”), for a total purchase price of $ 8.1 billion, consisting primarily of cash. The purchase price included $ 766 million of cash and cash equivalents acquired. Bethesda is one of the largest, privately held game developers and publishers in the world, and brings a broad portfolio of games, technology, and talent to Xbox. The financial results of ZeniMax have been included in our consolidated financial statements since the date of the acquisition. ZeniMax is reported as part of our More Personal Computing segment. The allocation of the purchase price to goodwill was completed as of December 31, 2021. The major classes of assets and liabilities to which we have allocated the purchase price were as follows: (In millions) Cash and cash equivalents $ 766 Goodwill 5,510 Intangible assets 1,968 Other assets 121 Other liabilities ( 244 ) Total $ 8,121 Goodwill was assigned to our More Personal Computing segment. The goodwill was primarily attributed to increased synergies that are expected to be achieved from the integration of ZeniMax. None of the goodwill is expected to be deductible for income tax purposes. Following are details of the purchase price allocated to the intangible assets acquired: (In millions, except average life) Amount Weighted Average Life Technology-based $ 1,341 4 years Marketing-related 627 11 years Total $ 1,968 6 years Activision Blizzard, Inc. On January 18, 2022 , we entered into a definitive agreement to acquire Activision Blizzard, Inc. (“Activision Blizzard”) for $ 95.00 per share in an all-cash transaction valued at $ 68.7 billion, inclusive of Activision Blizzard’s net cash. Activision Blizzard is a leader in game development and an interactive entertainment content publisher. The acquisition will accelerate the growth in our gaming business across mobile, PC, console, and cloud gaming. The acquisition has been approved by Activision Blizzard’s shareholders. We continue to work toward closing the transaction subject to obtaining required regulatory approvals and satisfaction of other customary closing conditions. Microsoft and Activision Blizzard have jointly agreed to extend the merger agreement through October 18, 2023 to allow for additional time to resolve remaining regulatory concerns. |
GOODWILL
GOODWILL | 12 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 9 — GOODWILL Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2021 Acquisitions Other June 30, 2022 Acquisitions Other June 30, Productivity and Business Processes $ 24,317 $ 599 $ ( 105 ) $ 24,811 $ 11 $ ( 47 ) $ 24,775 Intelligent Cloud 13,256 16,879 47 30,182 223 64 30,469 More Personal Computing 12,138 648 ( 255 ) 12,531 0 111 12,642 Total $ 49,711 $ 18,126 $ ( 313 ) $ 67,524 $ 234 $ 128 $ 67,886 The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but do not exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined. Any change in the goodwill amounts resulting from foreign currency translations and purchase accounting adjustments are presented as “Other” in the table above. Also included in “Other” are business dispositions and transfers between segments due to reorganizations, as applicable. Goodwill Impairment We test goodwill for impairment annually on May 1 at the reporting unit level, primarily using a discounted cash flow methodology with a peer-based, risk-adjusted weighted average cost of capital. We believe use of a discounted cash flow approach is the most reliable indicator of the fair values of the businesses. No instances of impairment were identified in our May 1, 2023, May 1, 2022, or May 1, 2021 tests. As of June 30, 2023 and 2022, accumulated goodwill impairment was $ 11.3 billion. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 10 — INTANGIBLE ASSETS The components of intangible assets, all of which are finite-lived, were as follows: (In millions) Gross Accumulated Net Carrying Gross Accumulated Net Carrying June 30, 2023 2022 Technology-based $ 11,245 $ ( 7,589 ) $ 3,656 $ 11,277 $ ( 6,958 ) $ 4,319 Customer-related 7,281 ( 4,047 ) 3,234 7,342 ( 3,171 ) 4,171 Marketing-related 4,935 ( 2,473 ) 2,462 4,942 ( 2,143 ) 2,799 Contract-based 29 ( 15 ) 14 16 ( 7 ) 9 Total $ 23,490 $ ( 14,124 ) $ 9,366 $ 23,577 $ ( 12,279 ) $ 11,298 No material impairments of intangible assets were identified during fiscal years 2023, 2022, or 2021. We estimate that we have no significant residual value related to our intangible assets. The components of intangible assets acquired during the periods presented were as follows: (In millions) Amount Weighted Average Life Amount Weighted Average Life Year Ended June 30, 2023 2022 Technology-based $ 522 7 years $ 2,611 4 years Customer-related 0 0 years 2,837 9 years Marketing-related 7 5 years 233 4 years Contract-based 12 3 years 0 0 years Total $ 541 6 years $ 5,681 7 years Intangible assets amortization expense was $ 2.5 billion, $ 2.0 billion, and $ 1.6 billion for fiscal years 2023, 2022, and 2021, respectively. The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2023: (In millions) Year Ending June 30, 2024 $ 2,363 2025 1,881 2026 1,381 2027 929 2028 652 Thereafter 2,160 Total $ 9,366 |
DEBT
DEBT | 12 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 11 — DEBT The components of debt were as follows: (In millions, issuance by calendar year) Maturities (calendar year) Stated Interest Rate Effective Interest Rate June 30, 2023 June 30, 2022 2009 issuance of $ 3.8 billion 2039 5.20 % 5.24 % $ 520 $ 520 2010 issuance of $ 4.8 billion 2040 4.50 % 4.57 % 486 486 2011 issuance of $ 2.3 billion 2041 5.30 % 5.36 % 718 718 2012 issuance of $ 2.3 billion 2042 3.50 % 3.57 % 454 1,204 2013 issuance of $ 5.2 billion 2023 – 2043 3.63 % – 4.88 % 3.73 % – 4.92 % 1,814 2,814 2013 issuance of € 4.1 billion 2028 – 2033 2.63 % – 3.13 % 2.69 % – 3.22 % 2,509 2,404 2015 issuance of $ 23.8 billion 2025 – 2055 2.70 % – 4.75 % 2.77 % – 4.78 % 9,805 10,805 2016 issuance of $ 19.8 billion 2023 – 2056 2.00 % – 3.95 % 2.10 % – 4.03 % 9,430 9,430 2017 issuance of $ 17.0 billion 2024 – 2057 2.88 % – 4.50 % 3.04 % – 4.53 % 8,945 8,945 2020 issuance of $ 10.0 billion 2050 – 2060 2.53 % – 2.68 % 2.53 % – 2.68 % 10,000 10,000 2021 issuance of $ 8.2 billion 2052 – 2062 2.92 % – 3.04 % 2.92 % – 3.04 % 8,185 8,185 Total face value 52,866 55,511 Unamortized discount and issuance costs ( 438 ) ( 471 ) Hedge fair value adjustments (a) ( 106 ) ( 68 ) Premium on debt exchange ( 5,085 ) ( 5,191 ) Total debt 47,237 49,781 Current portion of long-term debt ( 5,247 ) ( 2,749 ) Long-term debt $ 41,990 $ 47,032 (a) Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. As of June 30, 2023 and 2022, the estimated fair value of long-term debt, including the current portion, was $ 46.2 billion and $ 50.9 billion, respectively. The estimated fair values are based on Level 2 inputs. Debt in the table above is comprised of senior unsecured obligations and ranks equally with our other outstanding obligations. Interest is paid semi-annually, except for the Euro-denominated debt, which is paid annually. Cash paid for interest on our debt for fiscal years 2023, 2022, and 2021 was $ 1.7 billion, $ 1.9 billion, and $ 2.0 billion, respectively. The following table outlines maturities of our long-term debt, including the current portion, as of June 30, 2023: (In millions) Year Ending June 30, 2024 $ 5,250 2025 2,250 2026 3,000 2027 8,000 2028 0 Thereafter 34,366 Total $ 52,866 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 — INCOME TAXES Provision for Income Taxes The components of the provision for income taxes were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Current Taxes U.S. federal $ 14,009 $ 8,329 $ 3,285 U.S. state and local 2,322 1,679 1,229 Foreign 6,678 6,672 5,467 Current taxes $ 23,009 $ 16,680 $ 9,981 Deferred Taxes U.S. federal $ ( 6,146 ) $ ( 4,815 ) $ 25 U.S. state and local ( 477 ) ( 1,062 ) ( 204 ) Foreign 564 175 29 Deferred taxes $ ( 6,059 ) $ ( 5,702 ) $ ( 150 ) Provision for income taxes $ 16,950 $ 10,978 $ 9,831 U.S. and foreign components of income before income taxes were as follows: (In millions) Year Ended June 30, 2023 2022 2021 U.S. $ 52,917 $ 47,837 $ 34,972 Foreign 36,394 35,879 36,130 Income before income taxes $ 89,311 $ 83,716 $ 71,102 Effective Tax Rate The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows: Year Ended June 30, 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Effect of: Foreign earnings taxed at lower rates ( 1.8 )% ( 1.3 )% ( 2.7 )% Impact of intangible property transfers 0 % ( 3.9 )% 0 % Foreign-derived intangible income deduction ( 1.3 )% ( 1.1 )% ( 1.3 )% State income taxes, net of federal benefit 1.6 % 1.4 % 1.4 % Research and development credit ( 1.1 )% ( 0.9 )% ( 0.9 )% Excess tax benefits relating to stock-based compensation ( 0.7 )% ( 1.9 )% ( 2.4 )% Interest, net 0.8 % 0.5 % 0.5 % Other reconciling items, net 0.5 % ( 0.7 )% ( 1.8 )% Effective rate 19.0 % 13.1 % 13.8 % In the first quarter of fiscal year 2022, we transferred certain intangible properties from our Puerto Rico subsidiary to the U.S. The transfer of intangible properties resulted in a $ 3.3 billion net income tax benefit in the first quarter of fiscal year 2022, as the value of future U.S. tax deductions exceeded the current tax liability from the U.S. global intangible low-taxed income (“GILTI”) tax. We have historically paid India withholding taxes on software sales through distributor withholding and tax audit assessments in India. In March 2021, the India Supreme Court ruled favorably in the case of Engineering Analysis Centre of Excellence Private Limited vs The Commissioner of Income Tax for companies in 86 separate appeals, some dating back to 2012, holding that software sales are not subject to India withholding taxes. Although we were not a party to the appeals, our software sales in India were determined to be not subject to withholding taxes. Therefore, we recorded a net income tax benefit of $ 620 million in the third quarter of fiscal year 2021 to reflect the results of the India Supreme Court decision impacting fiscal year 1996 through fiscal year 2016 . The decrease from the federal statutory rate in fiscal year 2023 is primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations center in Ireland. The decrease from the federal statutory rate in fiscal year 2022 is primarily due to the net income tax benefit related to the transfer of intangible properties, earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations center in Ireland, and tax benefits relating to stock-based compensation. The decrease from the federal statutory rate in fiscal year 2021 is primarily due to earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland and Puerto Rico, tax benefits relating to stock-based compensation, and tax benefits from the India Supreme Court decision on withholding taxes. In fiscal year 2023, our foreign regional operating center in Ireland, which is taxed at a rate lower than the U.S. rate, generated 81 % of our foreign income before tax. In fiscal years 2022 and 2021 , our foreign regional operating centers in Ireland and Puerto Rico, which are taxed at rates lower than the U.S. rate, generated 71 % and 82 % of our foreign income before tax. Other reconciling items, net consists primarily of tax credits and GILTI tax, and in fiscal year 2021, includes tax benefits from the India Supreme Court decision on withholding taxes. In fiscal years 2023, 2022, and 2021, there were no individually significant other reconciling items. The increase in our effective tax rate for fiscal year 2023 compared to fiscal year 2022 was primarily due to a $ 3.3 billion net income tax benefit in the first quarter of fiscal year 2022 related to the transfer of intangible properties and a decrease in tax benefits relating to stock-based compensation. The decrease in our effective tax rate for fiscal year 2022 compared to fiscal year 2021 was primarily due to a $ 3.3 billion net income tax benefit in the first quarter of fiscal year 2022 related to the transfer of intangible properties, offset in part by changes in the mix of our income before income taxes between the U.S. and foreign countries, as well as tax benefits in the prior year from the India Supreme Court decision on withholding taxes, an agreement between the U.S. and India tax authorities related to transfer pricing, and final Tax Cuts and Jobs Act (“TCJA”) regulations. The components of the deferred income tax assets and liabilities were as follows: (In millions) June 30, 2023 2022 Deferred Income Tax Assets Stock-based compensation expense $ 681 $ 601 Accruals, reserves, and other expenses 3,131 2,874 Loss and credit carryforwards 1,441 1,546 Amortization (a) 9,440 10,183 Leasing liabilities 5,041 4,557 Unearned revenue 3,296 2,876 Book/tax basis differences in investments and debt 373 0 Capitalized research and development (a) 6,958 473 Other 489 461 Deferred income tax assets 30,850 23,571 Less valuation allowance ( 939 ) ( 1,012 ) Deferred income tax assets, net of valuation allowance $ 29,911 $ 22,559 Deferred Income Tax Liabilities Book/tax basis differences in investments and debt $ 0 $ ( 174 ) Leasing assets ( 4,680 ) ( 4,291 ) Depreciation ( 2,674 ) ( 1,602 ) Deferred tax on foreign earnings ( 2,738 ) ( 3,104 ) Other ( 89 ) ( 103 ) Deferred income tax liabilities $ ( 10,181 ) $ ( 9,274 ) Net deferred income tax assets $ 19,730 $ 13,285 Reported As Other long-term assets $ 20,163 $ 13,515 Long-term deferred income tax liabilities ( 433 ) ( 230 ) Net deferred income tax assets $ 19,730 $ 13,285 (a) Provisions enacted in the TCJA related to the capitalization for tax purposes of research and development expenditures became effective on July 1, 2022. These provisions require us to capitalize research and development expenditures and amortize them on our U.S. tax return over five or fifteen years, depending on where research is conducted. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when the taxes are paid or recovered. As of June 30, 2023, we had federal, state, and foreign net operating loss carryforwards of $ 509 million, $ 1.2 billion, and $ 2.3 billion, respectively. The federal and state net operating loss carryforwards have varying expiration dates ranging from fiscal year 2024 to 2043 or indefinite carryforward periods , if not utilized. The majority of our foreign net operating loss carryforwards do not expire. Certain acquired net operating loss carryforwards are subject to an annual limitation but are expected to be realized with the exception of those which have a valuation allowance. As of June 30, 2023, we had $ 456 million federal capital loss carryforwards for U.S. tax purposes from our acquisition of Nuance. The federal capital loss carryforwards are subject to an annual limitation and will expire in fiscal year 2025 . The valuation allowance disclosed in the table above relates to the foreign net operating loss carryforwards, federal capital loss carryforwards, and other net deferred tax assets that may not be realized. Income taxes paid, net of refunds, were $ 23.1 billion, $ 16.0 billion, and $ 13.4 billion in fiscal years 2023, 2022, and 2021, respectively. Uncertain Tax Positions Gross unrecognized tax benefits related to uncertain tax positions as of June 30, 2023, 2022, and 2021, were $ 17.1 billion, $ 15.6 billion, and $ 14.6 billion, respectively, which were primarily included in long-term income taxes in our consolidated balance sheets. If recognized, the resulting tax benefit would affect our effective tax rates for fiscal years 2023, 2022, and 2021 by $ 14.4 billion, $ 13.3 billion, and $ 12.5 billion, respectively. As of June 30, 2023, 2022, and 2021, we had accrued interest expense related to uncertain tax positions of $ 5.2 billion, $ 4.3 billion, and $ 4.3 billion, respectively, net of income tax benefits. The provision for income taxes for fiscal years 2023, 2022, and 2021 included interest expense related to uncertain tax positions of $ 918 million, $ 36 million, and $ 274 million, respectively, net of income tax benefits. The aggregate changes in the gross unrecognized tax benefits related to uncertain tax positions were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Beginning unrecognized tax benefits $ 15,593 $ 14,550 $ 13,792 Decreases related to settlements ( 329 ) ( 317 ) ( 195 ) Increases for tax positions related to the current year 1,051 1,145 790 Increases for tax positions related to prior years 870 461 461 Decreases for tax positions related to prior years ( 60 ) ( 246 ) ( 297 ) Decreases due to lapsed statutes of limitations ( 5 ) 0 ( 1 ) Ending unrecognized tax benefits $ 17,120 $ 15,593 $ 14,550 We settled a portion of the Internal Revenue Service (“IRS”) audit for tax years 2004 to 2006 in fiscal year 2011. In February 2012, the IRS withdrew its 2011 Revenue Agents Report related to unresolved issues for tax years 2004 to 2006 and reopened the audit phase of the examination. We also settled a portion of the IRS audit for tax years 2007 to 2009 in fiscal year 2016, and a portion of the IRS audit for tax years 2010 to 2013 in fiscal year 2018. In the second quarter of fiscal year 2021, we settled an additional portion of the IRS audits for tax years 2004 to 2013 and made a payment of $ 1.7 billion, including tax and interest. We remain under audit for tax years 2004 to 2017 . As of June 30, 2023, the primary unresolved issues for the IRS audits relate to transfer pricing, which could have a material impact in our consolidated financial statements when the matters are resolved. We believe our allowances for income tax contingencies are adequate. We have not received a proposed assessment for the unresolved key transfer pricing issues. We do not expect a final resolution of these issues in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies for these issues within the next 12 months. We are subject to income tax in many jurisdictions outside the U.S. Our operations in certain jurisdictions remain subject to examination for tax years 1996 to 2022 , some of which are currently under audit by local tax authorities. The resolution of each of these audits is not expected to be material to our consolidated financial statements. |
UNEARNED REVENUE
UNEARNED REVENUE | 12 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
UNEARNED REVENUE | NOTE 13 — UNEARNED REVENUE Unearned revenue by segment was as follows: (In millions) June 30, 2023 2022 Productivity and Business Processes $ 27,572 $ 24,558 Intelligent Cloud 21,563 19,371 More Personal Computing 4,678 4,479 Total $ 53,813 $ 48,408 Changes in unearned revenue were as follows: (In millions) Year Ended June 30, 2023 Balance, beginning of period $ 48,408 Deferral of revenue 123,935 Recognition of unearned revenue ( 118,530 ) Balance, end of period $ 53,813 Revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods, was $ 229 billion as of June 30, 2023, of which $ 224 billion is related to the commercial portion of revenue. We expect to recognize approximately 45 % of this revenue over the next 12 months and the remainder thereafter. |
LEASES
LEASES | 12 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 14 — LEASES We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. Our leases have remaining lease terms of less than 1 year to 18 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. The components of lease expense were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Operating lease cost $ 2,875 $ 2,461 $ 2,127 Finance lease cost: Amortization of right-of-use assets $ 1,352 $ 980 $ 921 Interest on lease liabilities 501 429 386 Total finance lease cost $ 1,853 $ 1,409 $ 1,307 Supplemental cash flow information related to leases was as follows: (In millions) Year Ended June 30, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,706 $ 2,368 $ 2,052 Operating cash flows from finance leases 501 429 386 Financing cash flows from finance leases 1,056 896 648 Right-of-use assets obtained in exchange for lease obligations: Operating leases 3,514 5,268 4,380 Finance leases 3,128 4,234 3,290 Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) June 30, 2023 2022 Operating Leases Operating lease right-of-use assets $ 14,346 $ 13,148 Other current liabilities $ 2,409 $ 2,228 Operating lease liabilities 12,728 11,489 Total operating lease liabilities $ 15,137 $ 13,717 Finance Leases Property and equipment, at cost $ 20,538 $ 17,388 Accumulated depreciation ( 4,647 ) ( 3,285 ) Property and equipment, net $ 15,891 $ 14,103 Other current liabilities $ 1,197 $ 1,060 Other long-term liabilities 15,870 13,842 Total finance lease liabilities $ 17,067 $ 14,902 Weighted Average Remaining Lease Term Operating leases 8 years 8 years Finance leases 11 years 12 years Weighted Average Discount Rate Operating leases 2.9 % 2.1 % Finance leases 3.4 % 3.1 % The following table outlines maturities of our lease liabilities as of June 30, 2023: (In millions) Year Ending June 30, Operating Leases Finance Leases 2024 $ 2,784 $ 1,747 2025 2,508 2,087 2026 2,142 1,771 2027 1,757 1,780 2028 1,582 1,787 Thereafter 6,327 11,462 Total lease payments 17,100 20,634 Less imputed interest ( 1,963 ) ( 3,567 ) Total $ 15,137 $ 17,067 As of June 30, 2023, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $ 7.7 billion and $ 34.4 billion, respectively. These operating and finance leases will commence between fiscal year 2024 and fiscal year 2030 with lease terms of 1 year to 18 years. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | NOTE 15 — CONTINGENCIES U.S. Cell Phone Litigation Microsoft Mobile Oy, a subsidiary of Microsoft, along with other handset manufacturers and network operators, is a defendant in 46 lawsuits, including 45 lawsuits filed in the Superior Court for the District of Columbia by individual plaintiffs who allege that radio emissions from cellular handsets caused their brain tumors and other adverse health effects. We assumed responsibility for these claims in our agreement to acquire Nokia’s Devices and Services business and have been substituted for the Nokia defendants. Nine of these cases were filed in 2002 and are consolidated for certain pre-trial proceedings; the remaining cases are stayed. In a separate 2009 decision, the Court of Appeals for the District of Columbia held that adverse health effect claims arising from the use of cellular handsets that operate within the U.S. Federal Communications Commission radio frequency emission guidelines (“FCC Guidelines”) are pre-empted by federal law. The plaintiffs allege that their handsets either operated outside the FCC Guidelines or were manufactured before the FCC Guidelines went into effect. The lawsuits also allege an industry-wide conspiracy to manipulate the science and testing around emission guidelines. In 2013, the defendants in the consolidated cases moved to exclude the plaintiffs’ expert evidence of general causation on the basis of flawed scientific methodologies. In 2014, the trial court granted in part and denied in part the defendants’ motion to exclude the plaintiffs’ general causation experts. The defendants filed an interlocutory appeal to the District of Columbia Court of Appeals challenging the standard for evaluating expert scientific evidence. In October 2016, the Court of Appeals issued its decision adopting the standard advocated by the defendants and remanding the cases to the trial court for further proceedings under that standard. The plaintiffs have filed supplemental expert evidence, portions of which were stricken by the court. A hearing on general causation took place in September of 2022. In April of 2023, the court granted defendants’ motion to strike the testimony of plaintiffs’ experts that cell phones cause brain cancer and entered an order excluding all of plaintiffs’ experts from testifying. Irish Data Protection Commission Matter In 2018, the Irish Data Protection Commission (“IDPC”) began investigating a complaint against LinkedIn as to whether LinkedIn’s targeted advertising practices violated the recently implemented European Union General Data Protection Regulation (“GDPR”). Microsoft cooperated throughout the period of inquiry. In April 2023, the IDPC provided LinkedIn with a non-public preliminary draft decision alleging GDPR violations and proposing a fine. Microsoft intends to challenge the preliminary draft decision. There is no set timeline for the IDPC to issue a final decision. Other Contingencies We also are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our business. Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact in our consolidated financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. As of June 30, 2023, we accrued aggregate legal liabilities of $ 617 million. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $ 600 million in aggregate beyond recorded amounts are reasonably possible. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact in our consolidated financial statements for the period in which the effects become reasonably estimable. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 16 — STOCKHOLDERS’ EQUITY Shares Outstanding Shares of common stock outstanding were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Balance, beginning of year 7,464 7,519 7,571 Issued 37 40 49 Repurchased ( 69 ) ( 95 ) ( 101 ) Balance, end of year 7,432 7,464 7,519 Share Repurchases On September 18, 2019, our Board of Directors approved a share repurchase program authorizing up to $ 40.0 billion in share repurchases. This share repurchase program commenced in February 2020 and was completed in November 2021. On September 14, 2021, our Board of Directors approved a share repurchase program authorizing up to $ 60.0 billion in share repurchases. This share repurchase program commenced in November 2021, following completion of the program approved on September 18, 2019, has no expiration date, and may be terminated at any time. As of June 30, 2023, $ 22.3 billion remained of this $ 60.0 billion share repurchase program. We repurchased the following shares of common stock under the share repurchase programs: (In millions) Shares Amount Shares Amount Shares Amount Year Ended June 30, 2023 2022 2021 First Quarter 17 $ 4,600 21 $ 6,200 25 $ 5,270 Second Quarter 20 4,600 20 6,233 27 5,750 Third Quarter 18 4,600 26 7,800 25 5,750 Fourth Quarter 14 4,600 28 7,800 24 6,200 Total 69 $ 18,400 95 $ 28,033 101 $ 22,970 All repurchases were made using cash resources. Shares repurchased during fiscal year 2023 and the fourth and third quarters of fiscal year 2022 were under the share repurchase program approved on September 14, 2021. Shares repurchased during the second quarter of fiscal year 2022 were under the share repurchase programs approved on both September 14, 2021 and September 18, 2019. All other shares repurchased were under the share repurchase program approved on September 18, 2019. The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards of $ 3.8 billion, $ 4.7 billion, and $ 4.4 billion for fiscal years 2023, 2022, and 2021, respectively. Dividends Our Board of Directors declared the following dividends: Declaration Date Record Date Payment Date Dividend Per Share Amount Fiscal Year 2023 (In millions) September 20, 2022 November 17, 2022 December 8, 2022 $ 0.68 $ 5,066 November 29, 2022 February 16, 2023 March 9, 2023 0.68 5,059 March 14, 2023 May 18, 2023 June 8, 2023 0.68 5,054 June 13, 2023 August 17, 2023 September 14, 2023 0.68 5,054 Total $ 2.72 $ 20,233 Fiscal Year 2022 September 14, 2021 November 18, 2021 December 9, 2021 $ 0.62 $ 4,652 December 7, 2021 February 17, 2022 March 10, 2022 0.62 4,645 March 14, 2022 May 19, 2022 June 9, 2022 0.62 4,632 June 14, 2022 August 18, 2022 September 8, 2022 0.62 4,621 Total $ 2.48 $ 18,550 The dividend declared on June 13, 2023 was included in other current liabilities as of June 30, 2023. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 17 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes in accumulated other comprehensive income (loss) by component : (In millions) Year Ended June 30, 2023 2022 2021 Derivatives Balance, beginning of period $ ( 13 ) $ ( 19 ) $ ( 38 ) Unrealized gains (losses), net of tax of $ 9 , $( 15 ), and $ 9 34 ( 57 ) 34 Reclassification adjustments for (gains) losses included in other income (expense), net ( 61 ) 79 ( 17 ) Tax expense (benefit) included in provision for income taxes 13 ( 16 ) 2 Amounts reclassified from accumulated other comprehensive income (loss) ( 48 ) 63 ( 15 ) Net change related to derivatives, net of tax of $( 4 ) , $ 1 , and $ 7 ( 14 ) 6 19 Balance, end of period $ ( 27 ) $ ( 13 ) $ ( 19 ) Investments Balance, beginning of period $ ( 2,138 ) $ 3,222 $ 5,478 Unrealized losses, net of tax of $( 393 ) , $( 1,440 ), and $( 589 ) ( 1,523 ) ( 5,405 ) ( 2,216 ) Reclassification adjustments for (gains) losses included in other income (expense), net 99 57 ( 63 ) Tax expense (benefit) included in provision for income taxes ( 20 ) ( 12 ) 13 Amounts reclassified from accumulated other comprehensive income (loss) 79 45 ( 50 ) Net change related to investments, net of tax of $( 373 ) , $( 1,428 ), and $( 602 ) ( 1,444 ) ( 5,360 ) ( 2,266 ) Cumulative effect of accounting changes 0 0 10 Balance, end of period $ ( 3,582 ) $ ( 2,138 ) $ 3,222 Translation Adjustments and Other Balance, beginning of period $ ( 2,527 ) $ ( 1,381 ) $ ( 2,254 ) Translation adjustments and other, net of tax of $ 0 , $ 0 , and $( 9 ) ( 207 ) ( 1,146 ) 873 Balance, end of period $ ( 2,734 ) $ ( 2,527 ) $ ( 1,381 ) Accumulated other comprehensive income (loss), end of period $ ( 6,343 ) $ ( 4,678 ) $ 1,822 |
EMPLOYEE STOCK AND SAVINGS PLAN
EMPLOYEE STOCK AND SAVINGS PLANS | 12 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
EMPLOYEE STOCK AND SAVINGS PLANS | NOTE 18 — EMPLOYEE STOCK AND SAVINGS PLANS We grant stock-based compensation to employees and directors. Awards that expire or are canceled without delivery of shares generally become available for issuance under the plans. We issue new shares of Microsoft common stock to satisfy vesting of awards granted under our stock plans. We also have an ESPP for all eligible employees. Stock-based compensation expense and related income tax benefits were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Stock-based compensation expense $ 9,611 $ 7,502 $ 6,118 Income tax benefits related to stock-based compensation 1,651 1,293 1,065 Stock Plans Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Stock awards generally vest over a service period of four years or five years . Executive Incentive Plan Under the Executive Incentive Plan, the Compensation Committee approves stock awards to executive officers and certain senior executives. RSUs generally vest ratably over a service period of four years . PSUs generally vest over a performance period of three years . The number of shares the PSU holder receives is based on the extent to which the corresponding performance goals have been achieved. Activity for All Stock Plans The fair value of stock awards was estimated on the date of grant using the following assumptions: Year ended June 30, 2023 2022 2021 Dividends per share (quarterly amounts) $ 0.62 – 0.68 $ 0.56 – 0.62 $ 0.51 – 0.56 Interest rates 2.0 % – 5.4 % 0.03 % – 3.6 % 0.01 % – 1.5 % During fiscal year 2023, the following activity occurred under our stock plans: Shares Weighted Average Grant-Date Fair Value (In millions) Stock Awards Nonvested balance, beginning of year 93 $ 227.59 Granted (a) 56 252.59 Vested ( 44 ) 206.90 Forfeited ( 9 ) 239.93 Nonvested balance, end of year 96 $ 250.37 (a) Includes 1 million, 1 million, and 2 million of PSUs granted at target and performance adjustments above target levels for fiscal years 2023, 2022, and 2021, respectively. As of June 30, 2023, total unrecognized compensation costs related to stock awards were $ 18.6 billion. These costs are expected to be recognized over a weighted average period of three years . The weighted average grant-date fair value of stock awards granted was $ 252.59 , $ 291.22 , and $ 221.13 for fiscal years 2023, 2022, and 2021, respectively. The fair value of stock awards vested was $ 11.9 billion, $ 14.1 billion, and $ 13.4 billion, for fiscal years 2023, 2022, and 2021, respectively. As of June 30, 2023, an aggregate of 164 million shares were authorized for future grant under our stock plans. Employee Stock Purchase Plan We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90 % of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15 % of their gross compensation during an offering period. Employees purchased the following shares during the periods presented: (Shares in millions) Year Ended June 30, 2023 2022 2021 Shares purchased 7 7 8 Average price per share $ 245.59 $ 259.55 $ 207.88 As of June 30, 2023, 74 million shares of our common stock were reserved for future issuance through the ESPP. Savings Plans We have savings plans in the U.S. that qualify under Section 401(k) of the Internal Revenue Code, and a number of savings plans in international locations. Eligible U.S. employees may contribute a portion of their salary into the savings plans, subject to certain limitations. We match a portion of each dollar a participant contributes into the plans. Employer-funded retirement benefits for all plans were $ 1.6 billion, $ 1.4 billion, and $ 1.2 billion in fiscal years 2023, 2022, and 2021, respectively, and were expensed as contributed. |
SEGMENT INFORMATION AND GEOGRAP
SEGMENT INFORMATION AND GEOGRAPHIC DATA | 12 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION AND GEOGRAPHIC DATA | NOTE 19 — SEGMENT INFORMATION AND GEOGRAPHIC DATA In its operation of the business, management, including our chief operating decision maker, who is also our Chief Executive Officer, reviews certain financial information, including segmented internal profit and loss statements prepared on a basis not consistent with GAAP. During the periods presented, we reported our financial performance based on the following segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. We have recast certain prior period amounts to conform to the way we internally manage and monitor our business. Our reportable segments are described below. Productivity and Business Processes Our Productivity and Business Processes segment consists of products and services in our portfolio of productivity, communication, and information services, spanning a variety of devices and platforms. This segment primarily comprises: • Office Commercial (Office 365 subscriptions, the Office 365 portion of Microsoft 365 Commercial subscriptions, and Office licensed on-premises), comprising Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, Microsoft Viva, and Microsoft 365 Copilot. • Office Consumer, including Microsoft 365 Consumer subscriptions, Office licensed on-premises, and other Office services. • LinkedIn, including Talent Solutions, Marketing Solutions, Premium Subscriptions, and Sales Solutions. • Dynamics business solutions, including Dynamics 365, comprising a set of intelligent, cloud-based applications across ERP, CRM (including Customer Insights), Power Apps, and Power Automate; and on-premises ERP and CRM applications. Intelligent Cloud Our Intelligent Cloud segment consists of our public, private, and hybrid server products and cloud services that can power modern business and developers. This segment primarily comprises: • Server products and cloud services, including Azure and other cloud services; SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (“CALs”); and Nuance and GitHub. • Enterprise Services, including Enterprise Support Services, Industry Solutions (formerly Microsoft Consulting Services), and Nuance professional services. More Personal Computing Our More Personal Computing segment consists of products and services that put customers at the center of the experience with our technology. This segment primarily comprises: • Windows, including Windows OEM licensing and other non-volume licensing of the Windows operating system; Windows Commercial, comprising volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; and Windows Internet of Things. • Devices, including Surface, HoloLens, and PC accessories. • Gaming, including Xbox hardware and Xbox content and services, comprising first- and third-party content (including games and in-game content), Xbox Game Pass and other subscriptions, Xbox Cloud Gaming, advertising, third-party disc royalties, and other cloud services. • Search and news advertising, comprising Bing (including Bing Chat), Microsoft News, Microsoft Edge, and third-party affiliates. Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit and are generally allocated based on relative gross margin. In addition, certain costs are incurred at a corporate level and allocated to our segments. These allocated costs generally include legal, including settlements and fines, information technology, human resources, finance, excise taxes, field selling, shared facilities services, customer service and support , and severance incurred as part of a corporate program. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated and is generally based on relative gross margin or relative headcount. Segment revenue and operating income were as follows during the periods presented: (In millions) Year Ended June 30, 2023 2022 2021 Revenue Productivity and Business Processes $ 69,274 $ 63,364 $ 53,915 Intelligent Cloud 87,907 74,965 59,728 More Personal Computing 54,734 59,941 54,445 Total $ 211,915 $ 198,270 $ 168,088 Operating Income Productivity and Business Processes $ 34,189 $ 29,690 $ 24,351 Intelligent Cloud 37,884 33,203 26,471 More Personal Computing 16,450 20,490 19,094 Total $ 88,523 $ 83,383 $ 69,916 No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for fiscal years 2023, 2022, or 2021. Revenue, classified by the major geographic areas in which our customers were located, was as follows: (In millions) Year Ended June 30, 2023 2022 2021 United States (a) $ 106,744 $ 100,218 $ 83,953 Other countries 105,171 98,052 84,135 Total $ 211,915 $ 198,270 $ 168,088 (a) Includes billings to OEMs and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. Revenue, classified by significant product and service offerings, was as follows: (In millions) Year Ended June 30, 2023 2022 2021 Server products and cloud services $ 79,970 $ 67,350 $ 52,589 Office products and cloud services 48,728 44,862 39,872 Windows 21,507 24,732 22,488 Gaming 15,466 16,230 15,370 LinkedIn 15,145 13,816 10,289 Search and news advertising 12,208 11,591 9,267 Enterprise Services 7,722 7,407 6,943 Devices 5,521 7,306 7,143 Dynamics 5,437 4,687 3,754 Other 211 289 373 Total $ 211,915 $ 198,270 $ 168,088 Our Microsoft Cloud revenue, which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $ 111.6 billion, $ 91.4 billion, and $ 69.1 billion in fiscal years 2023, 2022, and 2021, respectively. These amounts are primarily included in Server products and cloud services, Office products and cloud services, LinkedIn, and Dynamics in the table above. Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment. It is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss. Long-lived assets, excluding financial instruments and tax assets, classified by the location of the controlling statutory company and with countries over 10% of the total shown separately, were as follows: (In millions) June 30, 2023 2022 2021 United States $ 114,380 $ 106,430 $ 76,153 Ireland 16,359 15,505 13,303 Other countries 56,500 44,433 38,858 Total $ 187,239 $ 166,368 $ 128,314 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Accounting Principles | Accounting Principles Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We have recast certain prior period amounts to conform to the current period presentation. The recast of these prior period amounts had no impact on our consolidated balance sheets, consolidated income statements, or consolidated cash flows statements. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Microsoft Corporation and its subsidiaries. Intercompany transactions and balances have been eliminated. |
Estimates and Assumptions | Estimates and Assumptions Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples of estimates and assumptions include: for revenue recognition, determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price (“SSP”) of performance obligations, variable consideration, and other obligations such as product returns and refunds; loss contingencies; product warranties; the fair value of and/or potential impairment of goodwill and intangible assets for our reporting units; product life cycles; useful lives of our tangible and intangible assets; allowances for doubtful accounts; the market value of, and demand for, our inventory; stock-based compensation forfeiture rates; when technological feasibility is achieved for our products; the potential outcome of uncertain tax positions that have been recognized in our consolidated financial statements or tax returns; and determining the timing and amount of impairments for investments. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties. In July 2022, we completed an assessment of the useful lives of our server and network equipment. Due to investments in software that increased efficiencies in how we operate our server and network equipment, as well as advances in technology, we determined we should increase the estimated useful lives of both server and network equipment from four years to six years . This change in accounting estimate was effective beginning fiscal year 2023. Based on the carrying amount of server and network equipment included in property and equipment, net as of June 30, 2022, the effect of this change in estimate for fiscal year 2023 was an increase in operating income of $ 3.7 billion and net income of $ 3.0 billion, or $ 0.40 per both basic and diluted share. |
Foreign Currencies | Foreign Currencies Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Translation adjustments resulting from this process are recorded to other comprehensive income. |
Revenue | Revenue Product Revenue and Service and Other Revenue Product revenue includes sales from operating systems, cross-device productivity and collaboration applications, server applications, business solution applications, desktop and server management tools, software development tools, video games, and hardware such as PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. Service and other revenue includes sales from cloud-based solutions that provide customers with software, services, platforms, and content such as Office 365, Azure, Dynamics 365, and Xbox; solution support; and consulting services. Service and other revenue also includes sales from online advertising and LinkedIn. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. In cases where we allocate revenue to software updates, primarily because the updates are provided at no additional charge, revenue is recognized as the updates are provided, which is generally ratably over the estimated life of the related device or license. Certain volume licensing programs, including Enterprise Agreements, include on-premises licenses combined with Software Assurance (“SA”). SA conveys rights to new software and upgrades released over the contract period and provides support, tools, and training to help customers deploy and use products more efficiently. On-premises licenses are considered distinct performance obligations when sold with SA. Revenue allocated to SA is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits, given that SA comprises distinct performance obligations that are satisfied over time. Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on either a subscription or consumption basis. Revenue related to cloud services provided on a subscription basis is recognized ratably over the contract period. Revenue related to cloud services provided on a consumption basis, such as the amount of storage used in a period, is recognized based on the customer utilization of such resources. When cloud services require a significant level of integration and interdependency with software and the individual components are not considered distinct, all revenue is recognized over the period in which the cloud services are provided. Revenue from search advertising is recognized when the advertisement appears in the search results or when the action necessary to earn the revenue has been completed. Revenue from consulting services is recognized as services are provided. Our hardware is generally highly dependent on, and interrelated with, the underlying operating system and cannot function without the operating system. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to resellers or directly to end customers through retail stores and online marketplaces. Refer to Note 19 – Segment Information and Geographic Data for further information, including revenue by significant product and service offering. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. When a cloud-based service includes both on-premises software licenses and cloud services, judgment is required to determine whether the software license is considered distinct and accounted for separately, or not distinct and accounted for together with the cloud service and recognized over time. Certain cloud services, primarily Office 365, depend on a significant level of integration, interdependency, and interrelation between the desktop applications and cloud services, and are accounted for together as one performance obligation. Revenue from Office 365 is recognized ratably over the period in which the cloud services are provided. Judgment is required to determine the SSP for each distinct performance obligation. We use a single amount to estimate SSP for items that are not sold separately, including on-premises licenses sold with SA or software updates provided at no additional charge. We use a range of amounts to estimate SSP when we sell each of the products and services separately and need to determine whether there is a discount to be allocated based on the relative SSP of the various products and services. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we may use information such as the size of the customer and geographic region in determining the SSP. Due to the various benefits from and the nature of our SA program, judgment is required to assess the pattern of delivery, including the exercise pattern of certain benefits across our portfolio of customers. Our products are generally sold with a right of return, we may provide other credits or incentives, and in certain instances we estimate customer usage of our products and services, which are accounted for as variable consideration when determining the amount of revenue to recognize. Returns and credits are estimated at contract inception and updated at the end of each reporting period if additional information becomes available. Changes to our estimated variable consideration were not material for the periods presented. Contract Balances and Other Receivables Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For multi-year agreements, we generally invoice customers annually at the beginning of each annual coverage period. We record a receivable related to revenue recognized for multi-year on-premises licenses as we have an unconditional right to invoice and receive payment in the future related to those licenses. Unearned revenue comprises mainly unearned revenue related to volume licensing programs, which may include SA and cloud services. Unearned revenue is generally invoiced annually at the beginning of each contract period for multi-year agreements and recognized ratably over the coverage period. Unearned revenue also includes payments for consulting services to be performed in the future, LinkedIn subscriptions, Office 365 subscriptions, Xbox subscriptions, Windows post-delivery support, Dynamics business solutions, and other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. Refer to Note 13 – Unearned Revenue for further information, including unearned revenue by segment and changes in unearned revenue during the period. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period, and multi-year on-premises licenses that are invoiced annually with revenue recognized upfront. As of June 30, 2023 and 2022, long-term accounts receivable, net of allowance for doubtful accounts, was $ 4.5 billion and $ 3.8 billion, respectively, and is included in other long-term assets in our consolidated balance sheets. The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. Activity in the allowance for doubtful accounts was as follows: (In millions) Year Ended June 30, 2023 2022 2021 Balance, beginning of period $ 710 $ 798 $ 816 Charged to costs and other 258 157 234 Write-offs ( 252 ) ( 245 ) ( 252 ) Balance, end of period $ 716 $ 710 $ 798 Allowance for doubtful accounts included in our consolidated balance sheets: (In millions) June 30, 2023 2022 2021 Accounts receivable, net of allowance for doubtful accounts $ 650 $ 633 $ 751 Other long-term assets 66 77 47 Total $ 716 $ 710 $ 798 As of June 30, 2023 and 2022, other receivables related to activities to facilitate the purchase of server components were $ 9.2 billion and $ 6.1 billion, respectively, and are included in other current assets in our consolidated balance sheets. We record financing receivables when we offer certain of our customers the option to acquire our software products and services offerings through a financing program in a limited number of countries. As of June 30, 2023 and 2022, our financing receivables, net were $ 5.3 billion and $ 4.1 billion, respectively, for short-term and long-term financing receivables, which are included in other current assets and other long-term assets in our consolidated balance sheets. We record an allowance to cover expected losses based on troubled accounts, historical experience, and other currently available evidence. Assets Recognized from Costs to Obtain a Contract with a Customer We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets in our consolidated balance sheets. We apply a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. These costs include our internal sales organization compensation program and certain partner sales incentive programs as we have determined annual compensation is commensurate with annual sales activities. |
Cost of Revenue | Cost of Revenue Cost of revenue includes: manufacturing and distribution costs for products sold and programs licensed; operating costs related to product support service centers and product distribution centers; costs incurred to include software on PCs sold by original equipment manufacturers (“OEM”), to drive traffic to our websites, and to acquire online advertising space; costs incurred to support and maintain cloud-based and other online products and services, including datacenter costs and royalties; warranty costs; inventory valuation adjustments; costs associated with the delivery of consulting services; and the amortization of capitalized software development costs. Capitalized software development costs are amortized over the estimated lives of the products. |
Product Warranty | Product Warranty We provide for the estimated costs of fulfilling our obligations under hardware and software warranties at the time the related revenue is recognized. For hardware warranties, we estimate the costs based on historical and projected product failure rates, historical and projected repair costs, and knowledge of specific product failures (if any). The specific hardware warranty terms and conditions vary depending upon the product sold and the country in which we do business, but generally include parts and labor over a period generally ranging from 90 days to three years. For software warranties, we estimate the costs to provide bug fixes, such as security patches, over the estimated life of the software. We regularly reevaluate our estimates to assess the adequacy of the recorded warranty liabilities and adjust the amounts as necessary. |
Research and Development | Research and Development Research and development expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with product development. Research and development expenses also include third-party development and programming costs and the amortization of purchased software code and services content. Such costs related to software development are included in research and development expense until the point that technological feasibility is reached, which for our software products, is generally shortly before the products are released to production. Once technological feasibility is reached, such costs are capitalized and amortized to cost of revenue over the estimated lives of the products. |
Sales and Marketing | Sales and Marketing Sales and marketing expenses include payroll, employee benefits, stock-based compensation expense, and other headcount-related expenses associated with sales and marketing personnel, and the costs of advertising, promotions, trade shows, seminars, and other programs. Advertising costs are expensed as incurred. Advertising expense was $ 904 million , $ 1.5 billion, and $ 1.5 billion in fiscal years 2023, 2022, and 2021, respectively. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost for stock awards, which include restricted stock units (“RSUs”) and performance stock units (“PSUs”), is measured at the fair value on the grant date and recognized as expense, net of estimated forfeitures, over the related service or performance period. The fair value of stock awards is based on the quoted price of our common stock on the grant date less the present value of expected dividends not received during the vesting period. We measure the fair value of PSUs using a Monte Carlo valuation model. Compensation cost for RSUs is recognized using the straight-line method and for PSUs is recognized using the accelerated method. Compensation expense for the employee stock purchase plan (“ESPP”) is measured as the discount the employee is entitled to upon purchase and is recognized in the period of purchase. |
Employee Severance | Employee Severance On January 18, 2023, we announced a decision to reduce our overall workforce by approximately 10,000 jobs through the third quarter of fiscal year 2023. During the three months ended December 31, 2022, we recorded $ 800 million of employee severance expenses related to these job eliminations as part of an ongoing employee benefit plan. These employee severance expenses were incurred as part of a corporate program, and were included in general and administrative expenses in our consolidated income statements and allocated to our segments based on relative gross margin. Refer to Note 19 – Segment Information and Geographic Data for further information. |
Income Taxes | Income Taxes Income tax expense includes U.S. and international income taxes, and interest and penalties on uncertain tax positions. Certain income and expenses are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are reported net of a valuation allowance when it is more likely than not that a tax benefit will not be realized. All deferred income taxes are classified as long-term in our consolidated balance sheets. |
Investments | Investments We consider all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Debt investments are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive income. Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, we evaluate, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, we employ a systematic methodology that considers available quantitative and qualitative evidence. In addition, we consider specific adverse conditions related to the financial health of, and business outlook for, the investee. If we have plans to sell the security or it is more likely than not that we will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other income (expense), net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, we may incur future impairments. Equity investments with readily determinable fair values are measured at fair value. Equity investments without readily determinable fair values are measured using the equity method or measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expense), net. |
Derivatives | Derivatives Derivative instruments are recognized as either assets or liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, gains and losses are recognized in other income (expense), net with offsetting gains and losses on the hedged items. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in other income (expense), net with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in other income (expense), net. For derivative instruments that are not designated as hedges, gains and losses from changes in fair values are primarily recognized in other income (expense), net. |
Fair Value Measurements | Fair Value Measurements We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. Our Level 1 investments include U.S. government securities, common and preferred stock, and mutual funds. Our Level 1 derivative assets and liabilities include those actively traded on exchanges. • Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit spreads, foreign exchange rates, and forward and spot prices for currencies. Our Level 2 investments include commercial paper, certificates of deposit, U.S. agency securities, foreign government bonds, mortgage- and asset-backed securities, corporate notes and bonds, and municipal securities. Our Level 2 derivative assets and liabilities include certain cleared swap contracts and over-the-counter forward, option, and swap contracts. • Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include investments in corporate notes and bonds, municipal securities, and goodwill and intangible assets, when they are recorded at fair value due to an impairment charge. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities. We measure equity investments without readily determinable fair values on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. |
Inventories | Inventories Inventories are stated at average cost, subject to the lower of cost or net realizable value. Cost includes materials, labor, and manufacturing overhead related to the purchase and production of inventories. Net realizable value is the estimated selling price less estimated costs of completion, disposal, and transportation. We regularly review inventory quantities on hand, future purchase commitments with our suppliers, and the estimated utility of our inventory. If our review indicates a reduction in utility below carrying value, we reduce our inventory to a new cost basis through a charge to cost of revenue. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation, and depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated useful lives of our property and equipment are generally as follows: computer software developed or acquired for internal use, three years ; computer equipment, two to six years ; buildings and improvements, five to 15 years ; leasehold improvements, three to 20 years ; and furniture and equipment, one to 10 years . Land is not depreciated. |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities. |
Goodwill | Goodwill Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis (May 1) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. |
Intangible Assets | Intangible Assets Our intangible assets are subject to amortization and are amortized using the straight-line method over their estimated period of benefit, ranging from one to 20 years . We evaluate the recoverability of intangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. |
Earnings Per Share | Basic earnings per share (“EPS”) is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards. |
Segment Reporting | Revenue and costs are generally directly attributed to our segments. However, due to the integrated structure of our business, certain revenue recognized and costs incurred by one segment may benefit other segments. Revenue from certain contracts is allocated among the segments based on the relative value of the underlying products and services, which can include allocation based on actual prices charged, prices when sold separately, or estimated costs plus a profit margin. Cost of revenue is allocated in certain cases based on a relative revenue methodology. Operating expenses that are allocated primarily include those relating to marketing of products and services from which multiple segments benefit and are generally allocated based on relative gross margin. In addition, certain costs are incurred at a corporate level and allocated to our segments. These allocated costs generally include legal, including settlements and fines, information technology, human resources, finance, excise taxes, field selling, shared facilities services, customer service and support , and severance incurred as part of a corporate program. Each allocation is measured differently based on the specific facts and circumstances of the costs being allocated and is generally based on relative gross margin or relative headcount. Assets are not allocated to segments for internal reporting presentations. A portion of amortization and depreciation is included with various other costs in an overhead allocation to each segment. It is impracticable for us to separately identify the amount of amortization and depreciation by segment that is included in the measure of segment profit or loss. |
ACCOUNTING POLICIES (Tables)
ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Allowance for Doubtful Accounts | Activity in the allowance for doubtful accounts was as follows: (In millions) Year Ended June 30, 2023 2022 2021 Balance, beginning of period $ 710 $ 798 $ 816 Charged to costs and other 258 157 234 Write-offs ( 252 ) ( 245 ) ( 252 ) Balance, end of period $ 716 $ 710 $ 798 Allowance for doubtful accounts included in our consolidated balance sheets: (In millions) June 30, 2023 2022 2021 Accounts receivable, net of allowance for doubtful accounts $ 650 $ 633 $ 751 Other long-term assets 66 77 47 Total $ 716 $ 710 $ 798 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Share | The components of basic and diluted EPS were as follows: (In millions, except earnings per share) Year Ended June 30, 2023 2022 2021 Net income available for common shareholders (A) $ 72,361 $ 72,738 $ 61,271 Weighted average outstanding shares of common stock (B) 7,446 7,496 7,547 Dilutive effect of stock-based awards 26 44 61 Common stock and common stock equivalents (C) 7,472 7,540 7,608 Earnings Per Share Basic (A/B) $ 9.72 $ 9.70 $ 8.12 Diluted (A/C) $ 9.68 $ 9.65 $ 8.05 |
OTHER INCOME (EXPENSE), NET (Ta
OTHER INCOME (EXPENSE), NET (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Components of Other Income (Expense), Net | The components of other income (expense), net were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Interest and dividends income $ 2,994 $ 2,094 $ 2,131 Interest expense ( 1,968 ) ( 2,063 ) ( 2,346 ) Net recognized gains on investments 260 461 1,232 Net gains (losses) on derivatives ( 456 ) ( 52 ) 17 Net gains (losses) on foreign currency remeasurements 181 ( 75 ) 54 Other, net ( 223 ) ( 32 ) 98 Total $ 788 $ 333 $ 1,186 |
Debt Securities | |
Net Recognized Gains (Losses) on Investments | Net recognized gains (losses) on debt investments were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Realized gains from sales of available-for-sale securities $ 36 $ 162 $ 105 Realized losses from sales of available-for-sale securities ( 124 ) ( 138 ) ( 40 ) Impairments and allowance for credit losses ( 10 ) ( 81 ) ( 2 ) Total $ ( 98 ) $ ( 57 ) $ 63 |
Equity Securities | |
Net Recognized Gains (Losses) on Investments | Net recognized gains (losses) on equity investments were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Net realized gains on investments sold $ 75 $ 29 $ 123 Net unrealized gains on investments still held 303 509 1,057 Impairments of investments ( 20 ) ( 20 ) ( 11 ) Total $ 358 $ 518 $ 1,169 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Components | The components of investments were as follows: (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2023 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 16,589 $ 0 $ 0 $ 16,589 $ 12,231 $ 4,358 $ 0 Certificates of deposit Level 2 2,701 0 0 2,701 2,657 44 0 U.S. government securities Level 1 65,237 2 ( 3,870 ) 61,369 2,991 58,378 0 U.S. agency securities Level 2 2,703 0 0 2,703 894 1,809 0 Foreign government bonds Level 2 498 1 ( 24 ) 475 0 475 0 Mortgage- and asset-backed securities Level 2 824 1 ( 39 ) 786 0 786 0 Corporate notes and bonds Level 2 10,809 8 ( 583 ) 10,234 0 10,234 0 Corporate notes and bonds Level 3 120 0 0 120 0 120 0 Municipal securities Level 2 285 1 ( 18 ) 268 7 261 0 Municipal securities Level 3 103 0 ( 16 ) 87 0 87 0 Total debt investments $ 99,869 $ 13 $ ( 4,550 ) $ 95,332 $ 18,780 $ 76,552 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 10,138 $ 7,446 $ 0 $ 2,692 Equity investments Other 7,187 0 0 7,187 Total equity investments $ 17,325 $ 7,446 $ 0 $ 9,879 Cash $ 8,478 $ 8,478 $ 0 $ 0 Derivatives, net (a) 6 0 6 0 Total $ 121,141 $ 34,704 $ 76,558 $ 9,879 (In millions) Fair Value Level Adjusted Cost Basis Unrealized Gains Unrealized Losses Recorded Basis Cash and Cash Equivalents Short-term Investments Equity Investments June 30, 2022 Changes in Fair Value Recorded in Other Comprehensive Income Commercial paper Level 2 $ 2,500 $ 0 $ 0 $ 2,500 $ 2,498 $ 2 $ 0 Certificates of deposit Level 2 2,071 0 0 2,071 2,032 39 0 U.S. government securities Level 1 79,696 29 ( 2,178 ) 77,547 9 77,538 0 U.S. agency securities Level 2 419 0 ( 9 ) 410 0 410 0 Foreign government bonds Level 2 506 0 ( 24 ) 482 0 482 0 Mortgage- and asset-backed securities Level 2 727 1 ( 30 ) 698 0 698 0 Corporate notes and bonds Level 2 11,661 4 ( 554 ) 11,111 0 11,111 0 Corporate notes and bonds Level 3 67 0 0 67 0 67 0 Municipal securities Level 2 368 19 ( 13 ) 374 0 374 0 Municipal securities Level 3 103 0 ( 6 ) 97 0 97 0 Total debt investments $ 98,118 $ 53 $ ( 2,814 ) $ 95,357 $ 4,539 $ 90,818 $ 0 Changes in Fair Value Recorded in Net Income Equity investments Level 1 $ 1,590 $ 1,134 $ 0 $ 456 Equity investments Other 6,435 0 0 6,435 Total equity investments $ 8,025 $ 1,134 $ 0 $ 6,891 Cash $ 8,258 $ 8,258 $ 0 $ 0 Derivatives, net (a) 8 0 8 0 Total $ 111,648 $ 13,931 $ 90,826 $ 6,891 (a) Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. |
Unrealized Losses on Debt Investments | Debt investments with continuous unrealized losses for less than 12 months and 12 months or greater and their related fair values were as follows: Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2023 U.S. government and agency securities $ 7,950 $ ( 336 ) $ 45,273 $ ( 3,534 ) $ 53,223 $ ( 3,870 ) Foreign government bonds 77 ( 5 ) 391 ( 19 ) 468 ( 24 ) Mortgage- and asset-backed securities 257 ( 5 ) 412 ( 34 ) 669 ( 39 ) Corporate notes and bonds 2,326 ( 49 ) 7,336 ( 534 ) 9,662 ( 583 ) Municipal securities 111 ( 3 ) 186 ( 31 ) 297 ( 34 ) Total $ 10,721 $ ( 398 ) $ 53,598 $ ( 4,152 ) $ 64,319 $ ( 4,550 ) Less than 12 Months 12 Months or Greater Total (In millions) Fair Value Unrealized Fair Value Unrealized Total June 30, 2022 U.S. government and agency securities $ 59,092 $ ( 1,835 ) $ 2,210 $ ( 352 ) $ 61,302 $ ( 2,187 ) Foreign government bonds 418 ( 18 ) 27 ( 6 ) 445 ( 24 ) Mortgage- and asset-backed securities 510 ( 26 ) 41 ( 4 ) 551 ( 30 ) Corporate notes and bonds 9,443 ( 477 ) 786 ( 77 ) 10,229 ( 554 ) Municipal securities 178 ( 12 ) 74 ( 7 ) 252 ( 19 ) Total $ 69,641 $ ( 2,368 ) $ 3,138 $ ( 446 ) $ 72,779 $ ( 2,814 ) |
Debt Investment Maturities | Debt Investment Maturities (In millions) Adjusted Cost Basis Estimated Fair Value June 30, 2023 Due in one year or less $ 38,182 $ 38,048 Due after one year through five years 47,127 44,490 Due after five years through 10 years 13,262 11,628 Due after 10 years 1,298 1,166 Total $ 99,869 $ 95,332 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Notional Amounts of Outstanding Derivative Instruments Measured in U.S. Dollar Equivalents | The following table presents the notional amounts of our outstanding derivative instruments measured in U.S. dollar equivalents: (In millions) June 30, 2023 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts purchased $ 1,492 $ 635 Interest rate contracts purchased 1,078 1,139 Not Designated as Hedging Instruments Foreign exchange contracts purchased 7,874 10,322 Foreign exchange contracts sold 25,159 21,606 Equity contracts purchased 3,867 1,131 Equity contracts sold 2,154 0 Other contracts purchased 1,224 1,642 Other contracts sold 581 544 |
Fair Values of Derivative Instruments | The following table presents our derivative instruments: (In millions) Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities June 30, 2023 June 30, 2022 Designated as Hedging Instruments Foreign exchange contracts $ 34 $ ( 67 ) $ 0 $ ( 77 ) Interest rate contracts 16 0 3 0 Not Designated as Hedging Instruments Foreign exchange contracts 249 ( 332 ) 333 ( 362 ) Equity contracts 165 ( 400 ) 5 ( 95 ) Other contracts 5 ( 6 ) 15 ( 17 ) Gross amounts of derivatives 469 ( 805 ) 356 ( 551 ) Gross amounts of derivatives offset in the balance sheet ( 202 ) 206 ( 130 ) 133 Cash collateral received 0 ( 125 ) 0 ( 75 ) Net amounts of derivatives $ 267 $ ( 724 ) $ 226 $ ( 493 ) Reported as Short-term investments $ 6 $ 0 $ 8 $ 0 Other current assets 245 0 218 0 Other long-term assets 16 0 0 0 Other current liabilities 0 ( 341 ) 0 ( 298 ) Other long-term liabilities 0 ( 383 ) 0 ( 195 ) Total $ 267 $ ( 724 ) $ 226 $ ( 493 ) The following table presents the fair value of our derivatives instruments on a gross basis: (In millions) Level 1 Level 2 Level 3 Total June 30, 2023 Derivative assets $ 0 $ 462 $ 7 $ 469 Derivative liabilities 0 ( 805 ) 0 ( 805 ) June 30, 2022 Derivative assets 1 349 6 356 Derivative liabilities 0 ( 551 ) 0 ( 551 ) |
Gains (Losses) on Derivative Instruments | Gains (losses) on derivative instruments recognized in other income (expense), net were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Designated as Fair Value Hedging Instruments Foreign exchange contracts Derivatives $ 0 $ 49 $ 193 Hedged items 0 ( 50 ) ( 188 ) Excluded from effectiveness assessment 0 4 30 Interest rate contracts Derivatives ( 65 ) ( 92 ) ( 37 ) Hedged items 38 108 53 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Amount reclassified from accumulated other comprehensive income 61 ( 79 ) 17 Not Designated as Hedging Instruments Foreign exchange contracts ( 73 ) 383 27 Equity contracts ( 420 ) 13 ( 6 ) Other contracts ( 41 ) ( 85 ) 15 |
Cash Flow Hedges | Other Comprehensive Income (Loss) | |
Gains (Losses) on Derivative Instruments | Gains (losses), net of tax, on derivative instruments recognized in our consolidated comprehensive income statements were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Designated as Cash Flow Hedging Instruments Foreign exchange contracts Included in effectiveness assessment $ 34 $ ( 57 ) $ 34 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of inventories were as follows: (In millions) June 30, 2023 2022 Raw materials $ 709 $ 1,144 Work in process 23 82 Finished goods 1,768 2,516 Total $ 2,500 $ 3,742 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Components of Property and Equipment | The components of property and equipment were as follows: (In millions) June 30, 2023 2022 Land $ 5,683 $ 4,734 Buildings and improvements 68,465 55,014 Leasehold improvements 8,537 7,819 Computer equipment and software 74,961 60,631 Furniture and equipment 6,246 5,860 Total, at cost 163,892 134,058 Accumulated depreciation ( 68,251 ) ( 59,660 ) Total, net $ 95,641 $ 74,398 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Nuance Communications Inc. | |
Major Classes of Assets and Liabilities Allocated Purchase Price | The major classes of assets and liabilities to which we have allocated the purchase price were as follows: (In millions) Goodwill (a) $ 16,326 Intangible assets 4,365 Other assets 42 Other liabilities (b) ( 1,972 ) Total $ 18,761 (a) Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to increased synergies that are expected to be achieved from the integration of Nuance. None of the goodwill is expected to be deductible for income tax purposes. (b) Includes $ 986 million of convertible senior notes issued by Nuance in 2015 and 2017, substantially all of which have been redeemed. |
Acquired Intangible Assets | Following are the details of the purchase price allocated to the intangible assets acquired: (In millions, except average life) Amount Weighted Average Life Customer-related $ 2,610 9 years Technology-based 1,540 5 years Marketing-related 215 4 years Total $ 4,365 7 years |
ZeniMax Media Inc. | |
Major Classes of Assets and Liabilities Allocated Purchase Price | The allocation of the purchase price to goodwill was completed as of December 31, 2021. The major classes of assets and liabilities to which we have allocated the purchase price were as follows: (In millions) Cash and cash equivalents $ 766 Goodwill 5,510 Intangible assets 1,968 Other assets 121 Other liabilities ( 244 ) Total $ 8,121 |
Acquired Intangible Assets | Following are details of the purchase price allocated to the intangible assets acquired: (In millions, except average life) Amount Weighted Average Life Technology-based $ 1,341 4 years Marketing-related 627 11 years Total $ 1,968 6 years |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying Amount of Goodwill | Changes in the carrying amount of goodwill were as follows: (In millions) June 30, 2021 Acquisitions Other June 30, 2022 Acquisitions Other June 30, Productivity and Business Processes $ 24,317 $ 599 $ ( 105 ) $ 24,811 $ 11 $ ( 47 ) $ 24,775 Intelligent Cloud 13,256 16,879 47 30,182 223 64 30,469 More Personal Computing 12,138 648 ( 255 ) 12,531 0 111 12,642 Total $ 49,711 $ 18,126 $ ( 313 ) $ 67,524 $ 234 $ 128 $ 67,886 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets | The components of intangible assets, all of which are finite-lived, were as follows: (In millions) Gross Accumulated Net Carrying Gross Accumulated Net Carrying June 30, 2023 2022 Technology-based $ 11,245 $ ( 7,589 ) $ 3,656 $ 11,277 $ ( 6,958 ) $ 4,319 Customer-related 7,281 ( 4,047 ) 3,234 7,342 ( 3,171 ) 4,171 Marketing-related 4,935 ( 2,473 ) 2,462 4,942 ( 2,143 ) 2,799 Contract-based 29 ( 15 ) 14 16 ( 7 ) 9 Total $ 23,490 $ ( 14,124 ) $ 9,366 $ 23,577 $ ( 12,279 ) $ 11,298 |
Acquired Intangible Assets | The components of intangible assets acquired during the periods presented were as follows: (In millions) Amount Weighted Average Life Amount Weighted Average Life Year Ended June 30, 2023 2022 Technology-based $ 522 7 years $ 2,611 4 years Customer-related 0 0 years 2,837 9 years Marketing-related 7 5 years 233 4 years Contract-based 12 3 years 0 0 years Total $ 541 6 years $ 5,681 7 years |
Estimated Future Amortization Expense Related to Intangible Assets | The following table outlines the estimated future amortization expense related to intangible assets held as of June 30, 2023: (In millions) Year Ending June 30, 2024 $ 2,363 2025 1,881 2026 1,381 2027 929 2028 652 Thereafter 2,160 Total $ 9,366 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | The components of debt were as follows: (In millions, issuance by calendar year) Maturities (calendar year) Stated Interest Rate Effective Interest Rate June 30, 2023 June 30, 2022 2009 issuance of $ 3.8 billion 2039 5.20 % 5.24 % $ 520 $ 520 2010 issuance of $ 4.8 billion 2040 4.50 % 4.57 % 486 486 2011 issuance of $ 2.3 billion 2041 5.30 % 5.36 % 718 718 2012 issuance of $ 2.3 billion 2042 3.50 % 3.57 % 454 1,204 2013 issuance of $ 5.2 billion 2023 – 2043 3.63 % – 4.88 % 3.73 % – 4.92 % 1,814 2,814 2013 issuance of € 4.1 billion 2028 – 2033 2.63 % – 3.13 % 2.69 % – 3.22 % 2,509 2,404 2015 issuance of $ 23.8 billion 2025 – 2055 2.70 % – 4.75 % 2.77 % – 4.78 % 9,805 10,805 2016 issuance of $ 19.8 billion 2023 – 2056 2.00 % – 3.95 % 2.10 % – 4.03 % 9,430 9,430 2017 issuance of $ 17.0 billion 2024 – 2057 2.88 % – 4.50 % 3.04 % – 4.53 % 8,945 8,945 2020 issuance of $ 10.0 billion 2050 – 2060 2.53 % – 2.68 % 2.53 % – 2.68 % 10,000 10,000 2021 issuance of $ 8.2 billion 2052 – 2062 2.92 % – 3.04 % 2.92 % – 3.04 % 8,185 8,185 Total face value 52,866 55,511 Unamortized discount and issuance costs ( 438 ) ( 471 ) Hedge fair value adjustments (a) ( 106 ) ( 68 ) Premium on debt exchange ( 5,085 ) ( 5,191 ) Total debt 47,237 49,781 Current portion of long-term debt ( 5,247 ) ( 2,749 ) Long-term debt $ 41,990 $ 47,032 (a) Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. |
Maturities of Long-term Debt Including Current Portion | The following table outlines maturities of our long-term debt, including the current portion, as of June 30, 2023: (In millions) Year Ending June 30, 2024 $ 5,250 2025 2,250 2026 3,000 2027 8,000 2028 0 Thereafter 34,366 Total $ 52,866 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The components of the provision for income taxes were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Current Taxes U.S. federal $ 14,009 $ 8,329 $ 3,285 U.S. state and local 2,322 1,679 1,229 Foreign 6,678 6,672 5,467 Current taxes $ 23,009 $ 16,680 $ 9,981 Deferred Taxes U.S. federal $ ( 6,146 ) $ ( 4,815 ) $ 25 U.S. state and local ( 477 ) ( 1,062 ) ( 204 ) Foreign 564 175 29 Deferred taxes $ ( 6,059 ) $ ( 5,702 ) $ ( 150 ) Provision for income taxes $ 16,950 $ 10,978 $ 9,831 |
Income Before Income Taxes | U.S. and foreign components of income before income taxes were as follows: (In millions) Year Ended June 30, 2023 2022 2021 U.S. $ 52,917 $ 47,837 $ 34,972 Foreign 36,394 35,879 36,130 Income before income taxes $ 89,311 $ 83,716 $ 71,102 |
Difference Between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes | The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and our effective rate were as follows: Year Ended June 30, 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % Effect of: Foreign earnings taxed at lower rates ( 1.8 )% ( 1.3 )% ( 2.7 )% Impact of intangible property transfers 0 % ( 3.9 )% 0 % Foreign-derived intangible income deduction ( 1.3 )% ( 1.1 )% ( 1.3 )% State income taxes, net of federal benefit 1.6 % 1.4 % 1.4 % Research and development credit ( 1.1 )% ( 0.9 )% ( 0.9 )% Excess tax benefits relating to stock-based compensation ( 0.7 )% ( 1.9 )% ( 2.4 )% Interest, net 0.8 % 0.5 % 0.5 % Other reconciling items, net 0.5 % ( 0.7 )% ( 1.8 )% Effective rate 19.0 % 13.1 % 13.8 % |
Deferred Income Tax Assets and Liabilities | The components of the deferred income tax assets and liabilities were as follows: (In millions) June 30, 2023 2022 Deferred Income Tax Assets Stock-based compensation expense $ 681 $ 601 Accruals, reserves, and other expenses 3,131 2,874 Loss and credit carryforwards 1,441 1,546 Amortization (a) 9,440 10,183 Leasing liabilities 5,041 4,557 Unearned revenue 3,296 2,876 Book/tax basis differences in investments and debt 373 0 Capitalized research and development (a) 6,958 473 Other 489 461 Deferred income tax assets 30,850 23,571 Less valuation allowance ( 939 ) ( 1,012 ) Deferred income tax assets, net of valuation allowance $ 29,911 $ 22,559 Deferred Income Tax Liabilities Book/tax basis differences in investments and debt $ 0 $ ( 174 ) Leasing assets ( 4,680 ) ( 4,291 ) Depreciation ( 2,674 ) ( 1,602 ) Deferred tax on foreign earnings ( 2,738 ) ( 3,104 ) Other ( 89 ) ( 103 ) Deferred income tax liabilities $ ( 10,181 ) $ ( 9,274 ) Net deferred income tax assets $ 19,730 $ 13,285 Reported As Other long-term assets $ 20,163 $ 13,515 Long-term deferred income tax liabilities ( 433 ) ( 230 ) Net deferred income tax assets $ 19,730 $ 13,285 (a) Provisions enacted in the TCJA related to the capitalization for tax purposes of research and development expenditures became effective on July 1, 2022. These provisions require us to capitalize research and development expenditures and amortize them on our U.S. tax return over five or fifteen years, depending on where research is conducted. |
Changes in Gross Unrecognized Tax Benefits Related to Uncertain Tax Positions | The aggregate changes in the gross unrecognized tax benefits related to uncertain tax positions were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Beginning unrecognized tax benefits $ 15,593 $ 14,550 $ 13,792 Decreases related to settlements ( 329 ) ( 317 ) ( 195 ) Increases for tax positions related to the current year 1,051 1,145 790 Increases for tax positions related to prior years 870 461 461 Decreases for tax positions related to prior years ( 60 ) ( 246 ) ( 297 ) Decreases due to lapsed statutes of limitations ( 5 ) 0 ( 1 ) Ending unrecognized tax benefits $ 17,120 $ 15,593 $ 14,550 |
UNEARNED REVENUE (Tables)
UNEARNED REVENUE (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Unearned Revenue by Segment | Unearned revenue by segment was as follows: (In millions) June 30, 2023 2022 Productivity and Business Processes $ 27,572 $ 24,558 Intelligent Cloud 21,563 19,371 More Personal Computing 4,678 4,479 Total $ 53,813 $ 48,408 |
Changes in Unearned Revenue | Changes in unearned revenue were as follows: (In millions) Year Ended June 30, 2023 Balance, beginning of period $ 48,408 Deferral of revenue 123,935 Recognition of unearned revenue ( 118,530 ) Balance, end of period $ 53,813 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Operating lease cost $ 2,875 $ 2,461 $ 2,127 Finance lease cost: Amortization of right-of-use assets $ 1,352 $ 980 $ 921 Interest on lease liabilities 501 429 386 Total finance lease cost $ 1,853 $ 1,409 $ 1,307 |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: (In millions) Year Ended June 30, 2023 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,706 $ 2,368 $ 2,052 Operating cash flows from finance leases 501 429 386 Financing cash flows from finance leases 1,056 896 648 Right-of-use assets obtained in exchange for lease obligations: Operating leases 3,514 5,268 4,380 Finance leases 3,128 4,234 3,290 |
Supplemental Balance Sheet Information Related to Leases | Supplemental balance sheet information related to leases was as follows: (In millions, except lease term and discount rate) June 30, 2023 2022 Operating Leases Operating lease right-of-use assets $ 14,346 $ 13,148 Other current liabilities $ 2,409 $ 2,228 Operating lease liabilities 12,728 11,489 Total operating lease liabilities $ 15,137 $ 13,717 Finance Leases Property and equipment, at cost $ 20,538 $ 17,388 Accumulated depreciation ( 4,647 ) ( 3,285 ) Property and equipment, net $ 15,891 $ 14,103 Other current liabilities $ 1,197 $ 1,060 Other long-term liabilities 15,870 13,842 Total finance lease liabilities $ 17,067 $ 14,902 Weighted Average Remaining Lease Term Operating leases 8 years 8 years Finance leases 11 years 12 years Weighted Average Discount Rate Operating leases 2.9 % 2.1 % Finance leases 3.4 % 3.1 % |
Maturities of Lease Liabilities | The following table outlines maturities of our lease liabilities as of June 30, 2023: (In millions) Year Ending June 30, Operating Leases Finance Leases 2024 $ 2,784 $ 1,747 2025 2,508 2,087 2026 2,142 1,771 2027 1,757 1,780 2028 1,582 1,787 Thereafter 6,327 11,462 Total lease payments 17,100 20,634 Less imputed interest ( 1,963 ) ( 3,567 ) Total $ 15,137 $ 17,067 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Shares of Common Stock Outstanding | Shares of common stock outstanding were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Balance, beginning of year 7,464 7,519 7,571 Issued 37 40 49 Repurchased ( 69 ) ( 95 ) ( 101 ) Balance, end of year 7,432 7,464 7,519 |
Share Repurchases | We repurchased the following shares of common stock under the share repurchase programs: (In millions) Shares Amount Shares Amount Shares Amount Year Ended June 30, 2023 2022 2021 First Quarter 17 $ 4,600 21 $ 6,200 25 $ 5,270 Second Quarter 20 4,600 20 6,233 27 5,750 Third Quarter 18 4,600 26 7,800 25 5,750 Fourth Quarter 14 4,600 28 7,800 24 6,200 Total 69 $ 18,400 95 $ 28,033 101 $ 22,970 |
Dividends Declared | Our Board of Directors declared the following dividends: Declaration Date Record Date Payment Date Dividend Per Share Amount Fiscal Year 2023 (In millions) September 20, 2022 November 17, 2022 December 8, 2022 $ 0.68 $ 5,066 November 29, 2022 February 16, 2023 March 9, 2023 0.68 5,059 March 14, 2023 May 18, 2023 June 8, 2023 0.68 5,054 June 13, 2023 August 17, 2023 September 14, 2023 0.68 5,054 Total $ 2.72 $ 20,233 Fiscal Year 2022 September 14, 2021 November 18, 2021 December 9, 2021 $ 0.62 $ 4,652 December 7, 2021 February 17, 2022 March 10, 2022 0.62 4,645 March 14, 2022 May 19, 2022 June 9, 2022 0.62 4,632 June 14, 2022 August 18, 2022 September 8, 2022 0.62 4,621 Total $ 2.48 $ 18,550 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component | The following table summarizes the changes in accumulated other comprehensive income (loss) by component (In millions) Year Ended June 30, 2023 2022 2021 Derivatives Balance, beginning of period $ ( 13 ) $ ( 19 ) $ ( 38 ) Unrealized gains (losses), net of tax of $ 9 , $( 15 ), and $ 9 34 ( 57 ) 34 Reclassification adjustments for (gains) losses included in other income (expense), net ( 61 ) 79 ( 17 ) Tax expense (benefit) included in provision for income taxes 13 ( 16 ) 2 Amounts reclassified from accumulated other comprehensive income (loss) ( 48 ) 63 ( 15 ) Net change related to derivatives, net of tax of $( 4 ) , $ 1 , and $ 7 ( 14 ) 6 19 Balance, end of period $ ( 27 ) $ ( 13 ) $ ( 19 ) Investments Balance, beginning of period $ ( 2,138 ) $ 3,222 $ 5,478 Unrealized losses, net of tax of $( 393 ) , $( 1,440 ), and $( 589 ) ( 1,523 ) ( 5,405 ) ( 2,216 ) Reclassification adjustments for (gains) losses included in other income (expense), net 99 57 ( 63 ) Tax expense (benefit) included in provision for income taxes ( 20 ) ( 12 ) 13 Amounts reclassified from accumulated other comprehensive income (loss) 79 45 ( 50 ) Net change related to investments, net of tax of $( 373 ) , $( 1,428 ), and $( 602 ) ( 1,444 ) ( 5,360 ) ( 2,266 ) Cumulative effect of accounting changes 0 0 10 Balance, end of period $ ( 3,582 ) $ ( 2,138 ) $ 3,222 Translation Adjustments and Other Balance, beginning of period $ ( 2,527 ) $ ( 1,381 ) $ ( 2,254 ) Translation adjustments and other, net of tax of $ 0 , $ 0 , and $( 9 ) ( 207 ) ( 1,146 ) 873 Balance, end of period $ ( 2,734 ) $ ( 2,527 ) $ ( 1,381 ) Accumulated other comprehensive income (loss), end of period $ ( 6,343 ) $ ( 4,678 ) $ 1,822 |
EMPLOYEE STOCK AND SAVINGS PL_2
EMPLOYEE STOCK AND SAVINGS PLANS (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense and Related Income Tax Benefits | Stock-based compensation expense and related income tax benefits were as follows: (In millions) Year Ended June 30, 2023 2022 2021 Stock-based compensation expense $ 9,611 $ 7,502 $ 6,118 Income tax benefits related to stock-based compensation 1,651 1,293 1,065 |
Assumptions Used in Estimating the Fair Value of Stock Award Grants | The fair value of stock awards was estimated on the date of grant using the following assumptions: Year ended June 30, 2023 2022 2021 Dividends per share (quarterly amounts) $ 0.62 – 0.68 $ 0.56 – 0.62 $ 0.51 – 0.56 Interest rates 2.0 % – 5.4 % 0.03 % – 3.6 % 0.01 % – 1.5 % |
Stock Plan Activity | During fiscal year 2023, the following activity occurred under our stock plans: Shares Weighted Average Grant-Date Fair Value (In millions) Stock Awards Nonvested balance, beginning of year 93 $ 227.59 Granted (a) 56 252.59 Vested ( 44 ) 206.90 Forfeited ( 9 ) 239.93 Nonvested balance, end of year 96 $ 250.37 (a) Includes 1 million, 1 million, and 2 million of PSUs granted at target and performance adjustments above target levels for fiscal years 2023, 2022, and 2021, respectively. |
Employee Purchased Shares | Employees purchased the following shares during the periods presented: (Shares in millions) Year Ended June 30, 2023 2022 2021 Shares purchased 7 7 8 Average price per share $ 245.59 $ 259.55 $ 207.88 |
SEGMENT INFORMATION AND GEOGR_2
SEGMENT INFORMATION AND GEOGRAPHIC DATA (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Revenue | Segment revenue and operating income were as follows during the periods presented: (In millions) Year Ended June 30, 2023 2022 2021 Revenue Productivity and Business Processes $ 69,274 $ 63,364 $ 53,915 Intelligent Cloud 87,907 74,965 59,728 More Personal Computing 54,734 59,941 54,445 Total $ 211,915 $ 198,270 $ 168,088 Operating Income Productivity and Business Processes $ 34,189 $ 29,690 $ 24,351 Intelligent Cloud 37,884 33,203 26,471 More Personal Computing 16,450 20,490 19,094 Total $ 88,523 $ 83,383 $ 69,916 |
Segment Operating Income (Loss) | Segment revenue and operating income were as follows during the periods presented: (In millions) Year Ended June 30, 2023 2022 2021 Revenue Productivity and Business Processes $ 69,274 $ 63,364 $ 53,915 Intelligent Cloud 87,907 74,965 59,728 More Personal Computing 54,734 59,941 54,445 Total $ 211,915 $ 198,270 $ 168,088 Operating Income Productivity and Business Processes $ 34,189 $ 29,690 $ 24,351 Intelligent Cloud 37,884 33,203 26,471 More Personal Computing 16,450 20,490 19,094 Total $ 88,523 $ 83,383 $ 69,916 |
Revenue Classified by Major Geographic Areas | Revenue, classified by the major geographic areas in which our customers were located, was as follows: (In millions) Year Ended June 30, 2023 2022 2021 United States (a) $ 106,744 $ 100,218 $ 83,953 Other countries 105,171 98,052 84,135 Total $ 211,915 $ 198,270 $ 168,088 (a) Includes billings to OEMs and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. |
Revenue Classified by Significant Product and Service Offerings | Revenue, classified by significant product and service offerings, was as follows: (In millions) Year Ended June 30, 2023 2022 2021 Server products and cloud services $ 79,970 $ 67,350 $ 52,589 Office products and cloud services 48,728 44,862 39,872 Windows 21,507 24,732 22,488 Gaming 15,466 16,230 15,370 LinkedIn 15,145 13,816 10,289 Search and news advertising 12,208 11,591 9,267 Enterprise Services 7,722 7,407 6,943 Devices 5,521 7,306 7,143 Dynamics 5,437 4,687 3,754 Other 211 289 373 Total $ 211,915 $ 198,270 $ 168,088 Our Microsoft Cloud revenue, which includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties, was $ 111.6 billion, $ 91.4 billion, and $ 69.1 billion in fiscal years 2023, 2022, and 2021, respectively. These amounts are primarily included in Server products and cloud services, Office products and cloud services, LinkedIn, and Dynamics in the table above. |
Long-Lived Assets, Excluding Financial Instruments and Tax Assets, Classified by Location of Controlling Statutory Company | Long-lived assets, excluding financial instruments and tax assets, classified by the location of the controlling statutory company and with countries over 10% of the total shown separately, were as follows: (In millions) June 30, 2023 2022 2021 United States $ 114,380 $ 106,430 $ 76,153 Ireland 16,359 15,505 13,303 Other countries 56,500 44,433 38,858 Total $ 187,239 $ 166,368 $ 128,314 |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jan. 18, 2023 Job | Dec. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) $ / shares | Jun. 30, 2021 USD ($) $ / shares | Jul. 01, 2022 | |
Significant Accounting Policies [Line Items] | ||||||
Operating income | $ 88,523 | $ 83,383 | $ 69,916 | |||
Net income | $ 72,361 | $ 72,738 | $ 61,271 | |||
Income per basic share | $ / shares | $ 9.72 | $ 9.70 | $ 8.12 | |||
Income per diluted share | $ / shares | $ 9.68 | $ 9.65 | $ 8.05 | |||
Description of payment terms in contract with customer | Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. | |||||
Other receivables related to purchase of components | $ 9,200 | $ 6,100 | ||||
Financing receivables, net | 5,300 | 4,100 | ||||
Long-term accounts receivable, net of allowance for doubtful accounts | 4,500 | 3,800 | ||||
Advertising expense | $ 904 | $ 1,500 | $ 1,500 | |||
Estimated reduction in workforce | Job | 10,000 | |||||
Employee severance expenses | $ 800 | |||||
Lower Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of intangible assets | 1 year | |||||
Upper Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives of intangible assets | 20 years | |||||
Service Life | ||||||
Significant Accounting Policies [Line Items] | ||||||
Operating income | $ 3,700 | |||||
Net income | $ 3,000 | |||||
Income per basic share | $ / shares | $ 0.4 | |||||
Income per diluted share | $ / shares | $ 0.4 | |||||
Server Equipment | Service Life | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 4 years | 6 years | ||||
Network Equipment | Service Life | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 4 years | 6 years | ||||
Software | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 3 years | |||||
Computer Equipment | Lower Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 2 years | |||||
Computer Equipment | Upper Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 6 years | |||||
Buildings and Improvements | Lower Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 5 years | |||||
Buildings and Improvements | Upper Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 15 years | |||||
Leasehold Improvements | Lower Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 3 years | |||||
Leasehold Improvements | Upper Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 20 years | |||||
Furniture and Fixtures | Lower Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 1 year | |||||
Furniture and Fixtures | Upper Limit | ||||||
Significant Accounting Policies [Line Items] | ||||||
Estimated useful lives | 10 years |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts (Detail) - Allowance for doubtful accounts - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance, beginning of period | $ 710 | $ 798 | $ 816 |
Charged to costs and other | 258 | 157 | 234 |
Write-offs | (252) | (245) | (252) |
Balance, end of period | 716 | 710 | 798 |
Accounts receivable, net of allowance for doubtful accounts | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance, beginning of period | 633 | 751 | |
Balance, end of period | 650 | 633 | 751 |
Other Long-term Assets | |||
Valuation And Qualifying Accounts Disclosure [Line Items] | |||
Balance, beginning of period | 77 | 47 | |
Balance, end of period | $ 66 | $ 77 | $ 47 |
Basic and Diluted Earnings Per
Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earning Per Share Basic And Diluted [Abstract] | |||
Net income available for common shareholders (A) | $ 72,361 | $ 72,738 | $ 61,271 |
Weighted average outstanding shares of common stock (B) | 7,446 | 7,496 | 7,547 |
Dilutive effect of stock-based awards | 26 | 44 | 61 |
Common stock and common stock equivalents (C) | 7,472 | 7,540 | 7,608 |
Earnings Per Share | |||
Basic (A/B) | $ 9.72 | $ 9.70 | $ 8.12 |
Diluted (A/C) | $ 9.68 | $ 9.65 | $ 8.05 |
Components of Other Income (Exp
Components of Other Income (Expense), Net (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Other Income and Expenses [Abstract] | |||
Interest and dividends income | $ 2,994 | $ 2,094 | $ 2,131 |
Interest expense | (1,968) | (2,063) | (2,346) |
Net recognized gains on investments | 260 | 461 | 1,232 |
Net gains (losses) on derivatives | (456) | (52) | 17 |
Net gains (losses) on foreign currency remeasurements | 181 | (75) | 54 |
Other, net | (223) | (32) | 98 |
Total | $ 788 | $ 333 | $ 1,186 |
Net Recognized Gains (Losses) o
Net Recognized Gains (Losses) on Debt Investments (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | |||
Realized gains from sales of available-for-sale securities | $ 36 | $ 162 | $ 105 |
Realized losses from sales of available-for-sale securities | (124) | (138) | (40) |
Total | 260 | 461 | 1,232 |
Debt Securities | |||
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | |||
Impairments and allowance for credit losses | (10) | (81) | (2) |
Total | $ (98) | $ (57) | $ 63 |
Net Recognized Gains (Losses)_2
Net Recognized Gains (Losses) on Equity Investments (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | |||
Net realized gains on investments sold | $ 75 | $ 29 | $ 123 |
Net unrealized gains on investments still held | 303 | 509 | 1,057 |
Total | 260 | 461 | 1,232 |
Equity Securities | |||
Schedule Of Gain Loss On Investments Including Marketable Securities And Investments Held At Cost Income Statement Reported Amounts Summary [Line Items] | |||
Impairments of investments | (20) | (20) | (11) |
Total | $ 358 | $ 518 | $ 1,169 |
Investment Components (Detail)
Investment Components (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 | |
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | $ 99,869 | ||
Debt investments, Recorded Basis | 95,332 | ||
Derivative, net | 267 | $ 226 | |
Cash and cash equivalents | 34,704 | 13,931 | |
Short-term Investments | 76,558 | 90,826 | |
Equity Investments | 9,879 | 6,891 | |
Cash, cash equivalents, and investments | 121,141 | 111,648 | |
Equity Securities | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Equity investments, Recorded Basis | 17,325 | 8,025 | |
Cash and cash equivalents | 7,446 | 1,134 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 9,879 | 6,891 | |
Equity Securities | Other | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Equity investments, Recorded Basis | 7,187 | 6,435 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 7,187 | 6,435 | |
Equity Securities | Level 1 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Equity investments, Recorded Basis | 10,138 | 1,590 | |
Cash and cash equivalents | 7,446 | 1,134 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 2,692 | 456 | |
Cash | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Cash | 8,478 | 8,258 | |
Cash and cash equivalents | 8,478 | 8,258 | |
Short-term Investments | 0 | 0 | |
Equity Investments | 0 | 0 | |
Derivatives, net | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Derivative, net | [1] | 6 | 8 |
Cash and cash equivalents | [1] | 0 | 0 |
Short-term Investments | [1] | 6 | 8 |
Equity Investments | [1] | 0 | 0 |
Debt Securities | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 99,869 | 98,118 | |
Debt investments, Unrealized Gains | 13 | 53 | |
Debt investments, Unrealized Losses | (4,550) | (2,814) | |
Debt investments, Recorded Basis | 95,332 | 95,357 | |
Cash and cash equivalents | 18,780 | 4,539 | |
Short-term Investments | 76,552 | 90,818 | |
Equity Investments | 0 | 0 | |
Debt Securities | Commercial Paper | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 16,589 | 2,500 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 16,589 | 2,500 | |
Cash and cash equivalents | 12,231 | 2,498 | |
Short-term Investments | 4,358 | 2 | |
Equity Investments | 0 | 0 | |
Debt Securities | Certificates of deposit | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 2,701 | 2,071 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 2,701 | 2,071 | |
Cash and cash equivalents | 2,657 | 2,032 | |
Short-term Investments | 44 | 39 | |
Equity Investments | 0 | 0 | |
Debt Securities | U.S. government securities | Level 1 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 65,237 | 79,696 | |
Debt investments, Unrealized Gains | 2 | 29 | |
Debt investments, Unrealized Losses | (3,870) | (2,178) | |
Debt investments, Recorded Basis | 61,369 | 77,547 | |
Cash and cash equivalents | 2,991 | 9 | |
Short-term Investments | 58,378 | 77,538 | |
Equity Investments | 0 | 0 | |
Debt Securities | U.S. agency securities | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 2,703 | 419 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | (9) | |
Debt investments, Recorded Basis | 2,703 | 410 | |
Cash and cash equivalents | 894 | 0 | |
Short-term Investments | 1,809 | 410 | |
Equity Investments | 0 | 0 | |
Debt Securities | Foreign government bonds | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 498 | 506 | |
Debt investments, Unrealized Gains | 1 | 0 | |
Debt investments, Unrealized Losses | (24) | (24) | |
Debt investments, Recorded Basis | 475 | 482 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 475 | 482 | |
Equity Investments | 0 | 0 | |
Debt Securities | Mortgage- and asset-backed securities | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 824 | 727 | |
Debt investments, Unrealized Gains | 1 | 1 | |
Debt investments, Unrealized Losses | (39) | (30) | |
Debt investments, Recorded Basis | 786 | 698 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 786 | 698 | |
Equity Investments | 0 | 0 | |
Debt Securities | Corporate notes and bonds | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 10,809 | 11,661 | |
Debt investments, Unrealized Gains | 8 | 4 | |
Debt investments, Unrealized Losses | (583) | (554) | |
Debt investments, Recorded Basis | 10,234 | 11,111 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 10,234 | 11,111 | |
Equity Investments | 0 | 0 | |
Debt Securities | Corporate notes and bonds | Level 3 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 120 | 67 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | 0 | 0 | |
Debt investments, Recorded Basis | 120 | 67 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 120 | 67 | |
Equity Investments | 0 | 0 | |
Debt Securities | Municipal securities | Level 2 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 285 | 368 | |
Debt investments, Unrealized Gains | 1 | 19 | |
Debt investments, Unrealized Losses | (18) | (13) | |
Debt investments, Recorded Basis | 268 | 374 | |
Cash and cash equivalents | 7 | 0 | |
Short-term Investments | 261 | 374 | |
Equity Investments | 0 | 0 | |
Debt Securities | Municipal securities | Level 3 | |||
Cash Cash Equivalents And Investments [Line Items] | |||
Debt investments, Adjusted Cost Basis | 103 | 103 | |
Debt investments, Unrealized Gains | 0 | 0 | |
Debt investments, Unrealized Losses | (16) | (6) | |
Debt investments, Recorded Basis | 87 | 97 | |
Cash and cash equivalents | 0 | 0 | |
Short-term Investments | 87 | 97 | |
Equity Investments | $ 0 | $ 0 | |
[1] Refer to Note 5 – Derivatives for further information on the fair value of our derivative instruments. |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ in Billions | Jun. 30, 2023 | Jun. 30, 2022 |
Investments, Debt and Equity Securities [Abstract] | ||
Equity investments without readily determinable fair values measured at cost with adjustments for observable changes in price or impairments | $ 4.2 | $ 3.8 |
Unrealized Losses on Debt Inves
Unrealized Losses on Debt Investments (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | $ 10,721 | $ 69,641 |
Less than 12 Months - Unrealized Losses | (398) | (2,368) |
12 Months or Greater - Fair Value | 53,598 | 3,138 |
12 Months or Greater - Unrealized Losses | (4,152) | (446) |
Total Fair Value | 64,319 | 72,779 |
Total Unrealized Losses | (4,550) | (2,814) |
U.S. government and agency securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 7,950 | 59,092 |
Less than 12 Months - Unrealized Losses | (336) | (1,835) |
12 Months or Greater - Fair Value | 45,273 | 2,210 |
12 Months or Greater - Unrealized Losses | (3,534) | (352) |
Total Fair Value | 53,223 | 61,302 |
Total Unrealized Losses | (3,870) | (2,187) |
Foreign government bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 77 | 418 |
Less than 12 Months - Unrealized Losses | (5) | (18) |
12 Months or Greater - Fair Value | 391 | 27 |
12 Months or Greater - Unrealized Losses | (19) | (6) |
Total Fair Value | 468 | 445 |
Total Unrealized Losses | (24) | (24) |
Mortgage- and asset-backed securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 257 | 510 |
Less than 12 Months - Unrealized Losses | (5) | (26) |
12 Months or Greater - Fair Value | 412 | 41 |
12 Months or Greater - Unrealized Losses | (34) | (4) |
Total Fair Value | 669 | 551 |
Total Unrealized Losses | (39) | (30) |
Corporate notes and bonds | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 2,326 | 9,443 |
Less than 12 Months - Unrealized Losses | (49) | (477) |
12 Months or Greater - Fair Value | 7,336 | 786 |
12 Months or Greater - Unrealized Losses | (534) | (77) |
Total Fair Value | 9,662 | 10,229 |
Total Unrealized Losses | (583) | (554) |
Municipal securities | ||
Unrealized Losses on Investments [Line Items] | ||
Less than 12 Months - Fair Value | 111 | 178 |
Less than 12 Months - Unrealized Losses | (3) | (12) |
12 Months or Greater - Fair Value | 186 | 74 |
12 Months or Greater - Unrealized Losses | (31) | (7) |
Total Fair Value | 297 | 252 |
Total Unrealized Losses | $ (34) | $ (19) |
Debt Investment Maturities (Det
Debt Investment Maturities (Detail) $ in Millions | Jun. 30, 2023 USD ($) |
Adjusted Cost Basis | |
Due in one year or less | $ 38,182 |
Due after one year through five years | 47,127 |
Due after five years through 10 years | 13,262 |
Due after 10 years | 1,298 |
Debt investments, Adjusted Cost Basis | 99,869 |
Estimated Fair Value | |
Due in one year or less | 38,048 |
Due after one year through five years | 44,490 |
Due after five years through 10 years | 11,628 |
Due after 10 years | 1,166 |
Total | $ 95,332 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Derivative [Line Items] | ||
Minimum required liquidity under certain counterparty agreements | $ 1,000,000,000 | |
Minimum liquidity for the period as defined by certain counterparty agreements | 1,000,000,000 | |
Gross amounts of derivative assets, elected to offset | 442,000,000 | $ 343,000,000 |
Gross amounts of derivative liabilities, elected to offset | $ 804,000,000 | $ 550,000,000 |
Senior Unsecured Obligations | ||
Derivative [Line Items] | ||
Debt instrument credit rating | AAA |
Notional Amounts of Outstanding
Notional Amounts of Outstanding Derivative Instruments Measured in U.S. Dollar Equivalents (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | $ 1,492 | $ 635 |
Designated as Hedging Instruments | Interest Rate Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 1,078 | 1,139 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 7,874 | 10,322 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | 25,159 | 21,606 |
Not Designated as Hedging Instruments | Equity Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 3,867 | 1,131 |
Not Designated as Hedging Instruments | Equity Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | 2,154 | 0 |
Not Designated as Hedging Instruments | Other Contracts | Derivatives Purchased | ||
Derivative [Line Items] | ||
Notional amounts | 1,224 | 1,642 |
Not Designated as Hedging Instruments | Other Contracts | Derivatives Sold | ||
Derivative [Line Items] | ||
Notional amounts | $ 581 | $ 544 |
Fair Values of Derivative Instr
Fair Values of Derivative Instruments (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Derivatives Fair Value [Line Items] | ||
Derivative Assets | $ 469 | $ 356 |
Gross amounts of derivatives offset in the balance sheet, assets | (202) | (130) |
Cash collateral received, assets | 0 | 0 |
Net amounts of derivatives, assets | $ 267 | $ 226 |
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Other current assets | Other current assets |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term assets | Other long-term assets |
Derivative Liabilities | $ (805) | $ (551) |
Gross amounts of derivatives offset in the balance sheet, liabilities | 206 | 133 |
Cash collateral received, liabilities | (125) | (75) |
Net amounts of derivatives, liabilities | $ (724) | $ (493) |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities |
Derivative Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Derivative Asset Statement of Financial Position [Extensible Enumeration not Disclosed Flag] | Net amounts of derivatives, assets | Net amounts of derivatives, assets |
Derivative Liability Statement of Financial Position [Extensible Enumeration not Disclosed Flag] | Net amounts of derivatives, liabilities | Net amounts of derivatives, liabilities |
Level 1 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | $ 0 | $ 1 |
Derivative Liabilities | 0 | 0 |
Level 2 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 462 | 349 |
Derivative Liabilities | (805) | (551) |
Level 3 | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 7 | 6 |
Derivative Liabilities | 0 | 0 |
Designated as Hedging Instruments | Foreign Exchange Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 34 | 0 |
Derivative Liabilities | (67) | (77) |
Designated as Hedging Instruments | Interest Rate Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 16 | 3 |
Derivative Liabilities | 0 | 0 |
Not Designated as Hedging Instruments | Foreign Exchange Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 249 | 333 |
Derivative Liabilities | (332) | (362) |
Not Designated as Hedging Instruments | Equity Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 165 | 5 |
Derivative Liabilities | (400) | (95) |
Not Designated as Hedging Instruments | Other Contracts | ||
Derivatives Fair Value [Line Items] | ||
Derivative Assets | 5 | 15 |
Derivative Liabilities | (6) | (17) |
Short-term Investments | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 6 | 8 |
Other Current Assets | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 245 | 218 |
Other Long-term Assets | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, assets | 16 | 0 |
Other Current Liabilities | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, liabilities | (341) | (298) |
Other Long-term Liabilities | ||
Derivatives Fair Value [Line Items] | ||
Net amounts of derivatives, liabilities | $ (383) | $ (195) |
Gains (Losses) on Derivative In
Gains (Losses) on Derivative Instruments Recognized in Other Income (Expense), Net (Detail) - Other Income (Expense), Net - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Foreign Exchange Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (Losses) on Derivatives Not Designated as Hedges | $ (73) | $ 383 | $ 27 |
Equity Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (Losses) on Derivatives Not Designated as Hedges | (420) | 13 | (6) |
Other Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (Losses) on Derivatives Not Designated as Hedges | (41) | (85) | 15 |
Fair Value Hedges | Foreign Exchange Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives | 0 | 49 | 193 |
Hedged items | 0 | (50) | (188) |
Excluded from effectiveness assessment | 0 | 4 | 30 |
Fair Value Hedges | Interest Rate Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivatives | (65) | (92) | (37) |
Hedged items | 38 | 108 | 53 |
Cash Flow Hedges | Foreign Exchange Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount reclassified from accumulated other comprehensive income | $ 61 | $ (79) | $ 17 |
Gains (Losses), Net of Tax, on
Gains (Losses), Net of Tax, on Derivative Instruments Recognized on Consolidated Comprehensive Income Statements (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flow Hedges | Foreign Exchange Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Included in effectiveness assessment | $ 34 | $ (57) | $ 34 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 709 | $ 1,144 |
Work in process | 23 | 82 |
Finished goods | 1,768 | 2,516 |
Total | $ 2,500 | $ 3,742 |
Components of Property and Equi
Components of Property and Equipment (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 5,683 | $ 4,734 |
Buildings and improvements | 68,465 | 55,014 |
Leasehold improvements | 8,537 | 7,819 |
Computer equipment and software | 74,961 | 60,631 |
Furniture and equipment | 6,246 | 5,860 |
Total, at cost | 163,892 | 134,058 |
Accumulated depreciation | (68,251) | (59,660) |
Property and equipment, net | $ 95,641 | $ 74,398 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Billions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 11 | $ 12.6 | $ 9.3 |
Building, Building Improvements and Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Committed for construction of new buildings, building improvements and leasehold improvements | $ 13.5 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Mar. 04, 2022 | Jan. 18, 2022 | Mar. 09, 2021 |
Nuance Communications Inc. | |||
Business Acquisition [Line Items] | |||
Acquisition agreement date | Mar. 04, 2022 | ||
Total consideration transferred | $ 18,800 | ||
ZeniMax Media Inc. | |||
Business Acquisition [Line Items] | |||
Total consideration transferred | $ 8,100 | ||
Cash and cash equivalents acquired | $ 766 | ||
Acquisition date | Mar. 09, 2021 | ||
Activision Blizzard, Inc. | |||
Business Acquisition [Line Items] | |||
Acquisition agreement date | Jan. 18, 2022 | ||
Acquisition agreement share price | $ 95 | ||
Total purchase price to be transferred | $ 68,700 |
Major Classes of Assets and Lia
Major Classes of Assets and Liabilities Allocated Purchase Price (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 04, 2022 | Jun. 30, 2021 | Mar. 09, 2021 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 67,886 | $ 67,524 | $ 49,711 | |||
Nuance Communications Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | [1] | $ 16,326 | ||||
Intangible assets | 4,365 | |||||
Other assets | 42 | |||||
Other liabilities | [2] | (1,972) | ||||
Total | $ 18,761 | |||||
ZeniMax Media Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Cash and cash equivalents | $ 766 | |||||
Goodwill | 5,510 | |||||
Intangible assets | 1,968 | |||||
Other assets | 121 | |||||
Other liabilities | (244) | |||||
Total | $ 8,121 | |||||
[1] Goodwill was assigned to our Intelligent Cloud segment and was primarily attributed to increased synergies that are expected to be achieved from the integration of Nuance. None of the goodwill is expected to be deductible for income tax purposes. Includes $ 986 million of convertible senior notes issued by Nuance in 2015 and 2017, substantially all of which have been redeemed. |
Major Classes of Assets and L_2
Major Classes of Assets and Liabilities Allocated Purchase Price (Parenthetical) (Detail) $ in Millions | Mar. 04, 2022 USD ($) |
Nuance Communications Inc. | |
Business Acquisition [Line Items] | |
Redeemed debt | $ 986 |
Acquired Intangible Assets (Det
Acquired Intangible Assets (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Mar. 04, 2022 | Mar. 09, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Life | 6 years | 7 years | ||
Customer-related | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Life | 0 years | 9 years | ||
Technology-based | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Life | 7 years | 4 years | ||
Marketing-related | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Life | 5 years | 4 years | ||
Contract-based | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted Average Life | 3 years | 0 years | ||
Nuance Communications Inc. | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Fair value of intangible assets acquired | $ 4,365 | |||
Weighted Average Life | 7 years | |||
Nuance Communications Inc. | Customer-related | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Fair value of intangible assets acquired | $ 2,610 | |||
Weighted Average Life | 9 years | |||
Nuance Communications Inc. | Technology-based | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Fair value of intangible assets acquired | $ 1,540 | |||
Weighted Average Life | 5 years | |||
Nuance Communications Inc. | Marketing-related | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Fair value of intangible assets acquired | $ 215 | |||
Weighted Average Life | 4 years | |||
ZeniMax Media Inc. | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Fair value of intangible assets acquired | $ 1,968 | |||
Weighted Average Life | 6 years | |||
ZeniMax Media Inc. | Technology-based | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Fair value of intangible assets acquired | $ 1,341 | |||
Weighted Average Life | 4 years | |||
ZeniMax Media Inc. | Marketing-related | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Fair value of intangible assets acquired | $ 627 | |||
Weighted Average Life | 11 years |
Carrying Amount of Goodwill (De
Carrying Amount of Goodwill (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Goodwill [Line Items] | ||
Beginning Balance | $ 67,524 | $ 49,711 |
Acquisitions | 234 | 18,126 |
Other | 128 | (313) |
Ending Balance | 67,886 | 67,524 |
Productivity and Business Processes | ||
Goodwill [Line Items] | ||
Beginning Balance | 24,811 | 24,317 |
Acquisitions | 11 | 599 |
Other | (47) | (105) |
Ending Balance | 24,775 | 24,811 |
Intelligent Cloud | ||
Goodwill [Line Items] | ||
Beginning Balance | 30,182 | 13,256 |
Acquisitions | 223 | 16,879 |
Other | 64 | 47 |
Ending Balance | 30,469 | 30,182 |
More Personal Computing | ||
Goodwill [Line Items] | ||
Beginning Balance | 12,531 | 12,138 |
Acquisitions | 0 | 648 |
Other | 111 | (255) |
Ending Balance | $ 12,642 | $ 12,531 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) | May 01, 2023 | May 01, 2022 | May 01, 2021 | Jun. 30, 2023 | Jun. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill impairment charge | $ 0 | $ 0 | $ 0 | ||
Accumulated goodwill impairment | $ 11,300,000,000 | $ 11,300,000,000 |
Finite-Lived Intangible Assets
Finite-Lived Intangible Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 23,490 | $ 23,577 |
Accumulated Amortization | (14,124) | (12,279) |
Net Carrying Amount | 9,366 | 11,298 |
Technology-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 11,245 | 11,277 |
Accumulated Amortization | (7,589) | (6,958) |
Net Carrying Amount | 3,656 | 4,319 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 7,281 | 7,342 |
Accumulated Amortization | (4,047) | (3,171) |
Net Carrying Amount | 3,234 | 4,171 |
Marketing-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,935 | 4,942 |
Accumulated Amortization | (2,473) | (2,143) |
Net Carrying Amount | 2,462 | 2,799 |
Contract-based | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 29 | 16 |
Accumulated Amortization | (15) | (7) |
Net Carrying Amount | $ 14 | $ 9 |
Intangible Assets Acquired (Det
Intangible Assets Acquired (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 541 | $ 5,681 |
Weighted Average Life | 6 years | 7 years |
Technology-based | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 522 | $ 2,611 |
Weighted Average Life | 7 years | 4 years |
Customer-related | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 0 | $ 2,837 |
Weighted Average Life | 0 years | 9 years |
Marketing-related | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 7 | $ 233 |
Weighted Average Life | 5 years | 4 years |
Contract-based | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 12 | $ 0 |
Weighted Average Life | 3 years | 0 years |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Billions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible assets amortization expense | $ 2.5 | $ 2 | $ 1.6 |
Estimated Future Amortization E
Estimated Future Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Year Ending June 30, 2024 | $ 2,363 | |
Year Ending June 30, 2025 | 1,881 | |
Year Ending June 30, 2026 | 1,381 | |
Year Ending June 30, 2027 | 929 | |
Year Ending June 30, 2028 | 652 | |
Thereafter | 2,160 | |
Net Carrying Amount | $ 9,366 | $ 11,298 |
Debt (Detail)
Debt (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Debt Instrument [Line Items] | |||
Total face value | $ 52,866 | $ 55,511 | |
Unamortized discount and issuance costs | (438) | (471) | |
Hedge fair value adjustments | [1] | (106) | (68) |
Premium on debt exchange | (5,085) | (5,191) | |
Total debt | 47,237 | 49,781 | |
Current portion of long-term debt | (5,247) | (2,749) | |
Long-term debt | $ 41,990 | 47,032 | |
2009 Issuance of $3.8 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2039 | ||
Stated Interest Rate | 5.20% | ||
Effective Interest Rate | 5.24% | ||
Total face value | $ 520 | 520 | |
2010 Issuance of $4.8 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2040 | ||
Stated Interest Rate | 4.50% | ||
Effective Interest Rate | 4.57% | ||
Total face value | $ 486 | 486 | |
2011 Issuance of $2.3 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2041 | ||
Stated Interest Rate | 5.30% | ||
Effective Interest Rate | 5.36% | ||
Total face value | $ 718 | 718 | |
2012 Issuance of $2.3 billion | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2042 | ||
Stated Interest Rate | 3.50% | ||
Effective Interest Rate | 3.57% | ||
Total face value | $ 454 | 1,204 | |
2013 Issuance of $5.2 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 1,814 | 2,814 | |
2013 Issuance of $5.2 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2023 | ||
Stated Interest Rate | 3.63% | ||
Effective Interest Rate | 3.73% | ||
2013 Issuance of $5.2 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2043 | ||
Stated Interest Rate | 4.88% | ||
Effective Interest Rate | 4.92% | ||
2013 Issuance of €4.1 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 2,509 | 2,404 | |
2013 Issuance of €4.1 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2028 | ||
Stated Interest Rate | 2.63% | ||
Effective Interest Rate | 2.69% | ||
2013 Issuance of €4.1 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2033 | ||
Stated Interest Rate | 3.13% | ||
Effective Interest Rate | 3.22% | ||
2015 Issuance of $23.8 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 9,805 | 10,805 | |
2015 Issuance of $23.8 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2025 | ||
Stated Interest Rate | 2.70% | ||
Effective Interest Rate | 2.77% | ||
2015 Issuance of $23.8 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2055 | ||
Stated Interest Rate | 4.75% | ||
Effective Interest Rate | 4.78% | ||
2016 Issuance of $19.8 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 9,430 | 9,430 | |
2016 Issuance of $19.8 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2023 | ||
Stated Interest Rate | 2% | ||
Effective Interest Rate | 2.10% | ||
2016 Issuance of $19.8 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2056 | ||
Stated Interest Rate | 3.95% | ||
Effective Interest Rate | 4.03% | ||
2017 Issuance of $17.0 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 8,945 | 8,945 | |
2017 Issuance of $17.0 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2024 | ||
Stated Interest Rate | 2.88% | ||
Effective Interest Rate | 3.04% | ||
2017 Issuance of $17.0 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2057 | ||
Stated Interest Rate | 4.50% | ||
Effective Interest Rate | 4.53% | ||
2020 Issuance of $10.0 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 10,000 | 10,000 | |
2020 Issuance of $10.0 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2050 | ||
Stated Interest Rate | 2.53% | ||
Effective Interest Rate | 2.53% | ||
2020 Issuance of $10.0 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2060 | ||
Stated Interest Rate | 2.68% | ||
Effective Interest Rate | 2.68% | ||
2021 issuance of $8.2 billion | |||
Debt Instrument [Line Items] | |||
Total face value | $ 8,185 | $ 8,185 | |
2021 issuance of $8.2 billion | Minimum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2052 | ||
Stated Interest Rate | 2.92% | ||
Effective Interest Rate | 2.92% | ||
2021 issuance of $8.2 billion | Maximum | |||
Debt Instrument [Line Items] | |||
Maturities (calendar year) | 2062 | ||
Stated Interest Rate | 3.04% | ||
Effective Interest Rate | 3.04% | ||
[1] Refer to Note 5 – Derivatives for further information on the interest rate swaps related to fixed-rate debt. |
Debt (Parenthetical) (Detail)
Debt (Parenthetical) (Detail) - 12 months ended Jun. 30, 2023 € in Billions, $ in Billions | USD ($) | EUR (€) |
2009 Issuance of $3.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2009 | |
Debt, face value | $ 3.8 | |
2010 Issuance of $4.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2010 | |
Debt, face value | $ 4.8 | |
2011 Issuance of $2.3 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2011 | |
Debt, face value | $ 2.3 | |
2012 Issuance of $2.3 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2012 | |
Debt, face value | $ 2.3 | |
2013 Issuance of $5.2 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2013 | |
Debt, face value | $ 5.2 | |
2013 Issuance of €4.1 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2013 | |
Debt, face value | € | € 4.1 | |
2015 Issuance of $23.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2015 | |
Debt, face value | $ 23.8 | |
2016 Issuance of $19.8 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2016 | |
Debt, face value | $ 19.8 | |
2017 Issuance of $17.0 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2017 | |
Debt, face value | $ 17 | |
2020 Issuance of $10.0 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2020 | |
Debt, face value | $ 10 | |
2021 issuance of $8.2 billion | ||
Debt Instrument [Line Items] | ||
Debt, issuance date | 2021 | |
Debt, face value | $ 8.2 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Billions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |||
Long-term debt fair value | $ 46.2 | $ 50.9 | |
Cash paid for interest | $ 1.7 | $ 1.9 | $ 2 |
Maturities of Long-term Debt In
Maturities of Long-term Debt Including Current Portion (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Debt Disclosure [Abstract] | ||
Year Ending June 30, 2024 | $ 5,250 | |
Year Ending June 30, 2025 | 2,250 | |
Year Ending June 30, 2026 | 3,000 | |
Year Ending June 30, 2027 | 8,000 | |
Year Ending June 30, 2028 | 0 | |
Thereafter | 34,366 | |
Total | $ 52,866 | $ 55,511 |
Provision for Income Taxes (Det
Provision for Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Current Taxes | |||
U.S. federal | $ 14,009 | $ 8,329 | $ 3,285 |
U.S. state and local | 2,322 | 1,679 | 1,229 |
Foreign | 6,678 | 6,672 | 5,467 |
Current taxes | 23,009 | 16,680 | 9,981 |
Deferred Taxes | |||
U.S. federal | (6,146) | (4,815) | 25 |
U.S. state and local | (477) | (1,062) | (204) |
Foreign | 564 | 175 | 29 |
Deferred taxes | (6,059) | (5,702) | (150) |
Provision for income taxes | $ 16,950 | $ 10,978 | $ 9,831 |
Income Before Income Taxes (Det
Income Before Income Taxes (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 52,917 | $ 47,837 | $ 34,972 |
Foreign | 36,394 | 35,879 | 36,130 |
Income before income taxes | $ 89,311 | $ 83,716 | $ 71,102 |
Difference Between Income Taxes
Difference Between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes (Detail) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21% | 21% | 21% |
Effect of: | |||
Foreign earnings taxed at lower rates | (1.80%) | (1.30%) | (2.70%) |
Impact of intangible property transfers | 0% | (3.90%) | 0% |
Foreign-derived intangible income deduction | (1.30%) | (1.10%) | (1.30%) |
State income taxes, net of federal benefit | 1.60% | 1.40% | 1.40% |
Research and development credit | (1.10%) | (0.90%) | (0.90%) |
Excess tax benefits relating to stock-based compensation | (0.70%) | (1.90%) | (2.40%) |
Interest, net | 0.80% | 0.50% | 0.50% |
Other reconciling items, net | 0.50% | (0.70%) | (1.80%) |
Effective rate | 19% | 13.10% | 13.80% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Taxes [Line Items] | ||||||
Provision (benefit) for income taxes | $ 16,950 | $ 10,978 | $ 9,831 | |||
Income taxes paid, net of refunds | 23,100 | 16,000 | 13,400 | |||
Gross unrecognized tax benefits related to uncertain tax positions | 17,120 | 15,593 | 14,550 | $ 13,792 | ||
Gross unrecognized tax benefits related to uncertain tax positions, if recognized would affect our effective tax rates | 14,400 | 13,300 | 12,500 | |||
Accrued interest expense related to uncertain tax positions net of federal income tax benefits | 5,200 | 4,300 | 4,300 | |||
Interest expense related to uncertain tax positions, net of income tax benefits | $ 918 | $ 36 | $ 274 | |||
Regional Operating Centers | ||||||
Income Taxes [Line Items] | ||||||
Foreign earnings, taxed at rates lower than U.S. rate as a percentage of foreign income before tax | 81% | 71% | 82% | |||
Federal | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards | $ 509 | |||||
Capital loss carryforwards | $ 456 | |||||
Capital loss carryforwards expiration year | 2025 | |||||
State | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards | $ 1,200 | |||||
Foreign Country | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards | $ 2,300 | |||||
Transfer of Intangible Properties | ||||||
Income Taxes [Line Items] | ||||||
Provision (benefit) for income taxes | $ (3,300) | |||||
Earliest Tax Year | ||||||
Income Taxes [Line Items] | ||||||
Tax years impacted | 1996 | |||||
Earliest Tax Year | Federal and State | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards expiration year | 2024 | |||||
Latest Tax Year | ||||||
Income Taxes [Line Items] | ||||||
Tax years impacted | 2016 | |||||
Latest Tax Year | Federal and State | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards expiration year | 2043 | |||||
India Supreme Court | ||||||
Income Taxes [Line Items] | ||||||
Provision (benefit) for income taxes | $ (620) |
Deferred Income Tax Assets and
Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 | |
Deferred Income Tax Assets | |||
Stock-based compensation expense | $ 681 | $ 601 | |
Accruals, reserves, and other expenses | 3,131 | 2,874 | |
Loss and credit carryforwards | 1,441 | 1,546 | |
Amortization | [1] | 9,440 | 10,183 |
Leasing liabilities | 5,041 | 4,557 | |
Unearned revenue | 3,296 | 2,876 | |
Book/tax basis differences in investments and debt | 373 | 0 | |
Capitalized research and development | [1] | 6,958 | 473 |
Other | 489 | 461 | |
Deferred income tax assets | 30,850 | 23,571 | |
Less valuation allowance | (939) | (1,012) | |
Deferred income tax assets, net of valuation allowance | 29,911 | 22,559 | |
Deferred Income Tax Liabilities | |||
Book/tax basis differences in investments and debt | 0 | (174) | |
Leasing assets | (4,680) | (4,291) | |
Depreciation | (2,674) | (1,602) | |
Deferred tax on foreign earnings | (2,738) | (3,104) | |
Other | (89) | (103) | |
Deferred income tax liabilities | (10,181) | (9,274) | |
Net deferred income tax assets | 19,730 | 13,285 | |
Long-term deferred income tax liabilities | (433) | (230) | |
Other Long-term Assets | |||
Deferred Income Tax Liabilities | |||
Other long-term assets | $ 20,163 | $ 13,515 | |
[1] Provisions enacted in the TCJA related to the capitalization for tax purposes of research and development expenditures became effective on July 1, 2022. These provisions require us to capitalize research and development expenditures and amortize them on our U.S. tax return over five or fifteen years, depending on where research is conducted. |
Changes in Gross Unrecognized T
Changes in Gross Unrecognized Tax Benefits Related to Uncertain Tax Positions (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
Beginning unrecognized tax benefits | $ 15,593 | $ 14,550 | $ 13,792 |
Decreases related to settlements | (329) | (317) | (195) |
Increases for tax positions related to the current year | 1,051 | 1,145 | 790 |
Increases for tax positions related to prior years | 870 | 461 | 461 |
Decreases for tax positions related to prior years | (60) | (246) | (297) |
Decreases due to lapsed statutes of limitations | (5) | 0 | (1) |
Ending unrecognized tax benefits | $ 17,120 | $ 15,593 | $ 14,550 |
Income Taxes - Additional Inf_2
Income Taxes - Additional Information Regarding Examinations (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2020 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2018 | Jun. 30, 2016 | Jun. 30, 2011 | |
Income Tax Examination [Line Items] | |||||||
Settlement payments including tax and interest | $ 329 | $ 317 | $ 195 | ||||
Earliest Tax Year | Foreign Country | |||||||
Income Tax Examination [Line Items] | |||||||
Tax years subject to examination | 1996 | ||||||
Latest Tax Year | Foreign Country | |||||||
Income Tax Examination [Line Items] | |||||||
Tax years subject to examination | 2022 | ||||||
Internal Revenue Service (IRS) | |||||||
Income Tax Examination [Line Items] | |||||||
Settlement payments including tax and interest | $ 1,700 | ||||||
Internal Revenue Service (IRS) | Earliest Tax Year | |||||||
Income Tax Examination [Line Items] | |||||||
Tax years under audit | 2004 | 2010 | 2007 | 2004 | |||
Tax years subject to examination | 2004 | ||||||
Internal Revenue Service (IRS) | Latest Tax Year | |||||||
Income Tax Examination [Line Items] | |||||||
Tax years under audit | 2013 | 2013 | 2009 | 2006 | |||
Tax years subject to examination | 2017 |
Unearned Revenue by Segment (De
Unearned Revenue by Segment (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Contract With Customer Liability [Line Items] | ||
Unearned revenue | $ 53,813 | $ 48,408 |
Productivity and Business Processes | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | 27,572 | 24,558 |
Intelligent Cloud | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | 21,563 | 19,371 |
More Personal Computing | ||
Contract With Customer Liability [Line Items] | ||
Unearned revenue | $ 4,678 | $ 4,479 |
Changes in Unearned Revenue (De
Changes in Unearned Revenue (Detail) $ in Millions | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Balance, beginning of period | $ 48,408 |
Deferral of revenue | 123,935 |
Recognition of unearned revenue | (118,530) |
Balance, end of period | $ 53,813 |
Unearned Revenue - Additional I
Unearned Revenue - Additional Information (Detail) $ in Billions | Jun. 30, 2023 USD ($) |
Contract With Customer Liability [Line Items] | |
Revenue allocated to remaining performance obligations | $ 229 |
Commercial Customers | |
Contract With Customer Liability [Line Items] | |
Revenue allocated to remaining performance obligations | $ 224 |
Unearned Revenue - Remaining Pe
Unearned Revenue - Remaining Performance Obligation - Additional Information (Detail) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-07-01 | Jun. 30, 2023 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Revenue allocated to remaining performance obligations, percentage of revenue expected to be recognized | 45% |
Revenue allocated to remaining performance obligations, expected timing of satisfaction | 12 months |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Billions | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
Operating Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 7.7 |
Finance Lease | |
Leases [Line Items] | |
Additional leases, primarily for datacenters, that have not yet commenced | $ 34.4 |
Minimum | |
Leases [Line Items] | |
Operating and Finance leases, remaining lease terms | 1 year |
Additional operating leases that have not yet commenced, lease terms | 1 year |
Additional finance leases that have not yet commenced, lease terms | 1 year |
Maximum | |
Leases [Line Items] | |
Operating and Finance leases, remaining lease terms | 18 years |
Operating leases, options to extend leases term | 5 years |
Finance leases, options to extend leases term | 5 years |
Operating and Finance leases, options to terminate leases term | 1 year |
Additional operating leases that have not yet commenced, lease terms | 18 years |
Additional finance leases that have not yet commenced, lease terms | 18 years |
Components of Lease Expense (De
Components of Lease Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 2,875 | $ 2,461 | $ 2,127 |
Finance lease cost: | |||
Amortization of right-of-use assets | 1,352 | 980 | 921 |
Interest on lease liabilities | 501 | 429 | 386 |
Total finance lease cost | $ 1,853 | $ 1,409 | $ 1,307 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 2,706 | $ 2,368 | $ 2,052 |
Operating cash flows from finance leases | 501 | 429 | 386 |
Financing cash flows from finance leases | 1,056 | 896 | 648 |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | 3,514 | 5,268 | 4,380 |
Finance leases | $ 3,128 | $ 4,234 | $ 3,290 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Operating Leases | ||
Operating lease right-of-use assets | $ 14,346 | $ 13,148 |
Total operating lease liabilities | 15,137 | 13,717 |
Finance Leases | ||
Property and equipment, at cost | 163,892 | 134,058 |
Accumulated depreciation | (68,251) | (59,660) |
Property and equipment, net | 95,641 | 74,398 |
Total finance lease liabilities | $ 17,067 | $ 14,902 |
Weighted Average Remaining Lease Term | ||
Operating leases | 8 years | 8 years |
Finance leases | 11 years | 12 years |
Weighted Average Discount Rate | ||
Operating leases | 2.90% | 2.10% |
Finance leases | 3.40% | 3.10% |
Finance Lease | ||
Finance Leases | ||
Property and equipment, at cost | $ 20,538 | $ 17,388 |
Accumulated depreciation | (4,647) | (3,285) |
Property and equipment, net | 15,891 | 14,103 |
Other Current Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 2,409 | 2,228 |
Finance Leases | ||
Total finance lease liabilities | 1,197 | 1,060 |
Operating Lease Liabilities | ||
Operating Leases | ||
Total operating lease liabilities | 12,728 | 11,489 |
Other Long-term Liabilities | ||
Finance Leases | ||
Total finance lease liabilities | $ 15,870 | $ 13,842 |
Maturities of Lease Liabilities
Maturities of Lease Liabilities (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Leases [Abstract] | ||
Operating Leases, Year Ending June 30, 2024 | $ 2,784 | |
Operating Leases, Year Ending June 30, 2025 | 2,508 | |
Operating Leases, Year Ending June 30, 2026 | 2,142 | |
Operating Leases, Year Ending June 30, 2027 | 1,757 | |
Operating Leases, Year Ending June 30, 2028 | 1,582 | |
Operating Leases, Thereafter | 6,327 | |
Operating Leases, Total lease payments | 17,100 | |
Operating Leases, Less imputed interest | (1,963) | |
Operating Leases | 15,137 | $ 13,717 |
Finance Leases, Year Ending June 30, 2024 | 1,747 | |
Finance Leases, Year Ending June 30, 2025 | 2,087 | |
Finance Leases, Year Ending June 30, 2026 | 1,771 | |
Finance Leases, Year Ending June 30, 2027 | 1,780 | |
Finance Leases, Year Ending June 30, 2028 | 1,787 | |
Finance Leases, Thereafter | 11,462 | |
Finance Leases, Total lease payments | 20,634 | |
Finance Leases, Less imputed interest | (3,567) | |
Finance Leases | $ 17,067 | $ 14,902 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) $ in Millions | Jun. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Accrual for disclosed loss contingencies, current, ending balance | $ 617 |
Amount not accrued for estimated maximum losses for disclosed loss contingencies | $ 600 |
Shares of Common Stock Outstand
Shares of Common Stock Outstanding (Detail) - shares shares in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Equity [Abstract] | |||
Balance, beginning of year | 7,464 | 7,519 | 7,571 |
Issued | 37 | 40 | 49 |
Repurchased | (69) | (95) | (101) |
Balance, end of year | 7,432 | 7,464 | 7,519 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 14, 2021 | Sep. 18, 2019 | |
Share Repurchases [Line Items] | |||||
Amount of shares repurchased to settle employee tax withholding related to vesting of stock awards | $ 3,800,000,000 | $ 4,700,000,000 | $ 4,400,000,000 | ||
Share Repurchase Program 2019 | |||||
Share Repurchases [Line Items] | |||||
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors | $ 40,000,000,000 | ||||
Share Repurchase Program 2021 | |||||
Share Repurchases [Line Items] | |||||
Amount available for repurchase under the share repurchase program approved by the company's Board of Directors | $ 60,000,000,000 | ||||
Unused amount of share repurchase program | $ 22,300,000,000 |
Share Repurchases (Detail)
Share Repurchases (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share Repurchases [Line Items] | |||||||||||||||
Shares of common stock repurchased | 69,000,000 | 95,000,000 | 101,000,000 | ||||||||||||
Share Repurchase Program 2019 | |||||||||||||||
Share Repurchases [Line Items] | |||||||||||||||
Shares of common stock repurchased | 21,000,000 | 24,000,000 | 25,000,000 | 27,000,000 | 25,000,000 | 101,000,000 | |||||||||
Value of common stock repurchased | $ 6,200 | $ 6,200 | $ 5,750 | $ 5,750 | $ 5,270 | $ 22,970 | |||||||||
Share Repurchase Program 2019 and 2021 | |||||||||||||||
Share Repurchases [Line Items] | |||||||||||||||
Shares of common stock repurchased | 20,000,000 | 95,000,000 | |||||||||||||
Value of common stock repurchased | $ 6,233 | $ 28,033 | |||||||||||||
Share Repurchase Program 2021 | |||||||||||||||
Share Repurchases [Line Items] | |||||||||||||||
Shares of common stock repurchased | 14,000,000 | 18,000,000 | 20,000,000 | 17,000,000 | 28,000,000 | 26,000,000 | 69,000,000 | ||||||||
Value of common stock repurchased | $ 4,600 | $ 4,600 | $ 4,600 | $ 4,600 | $ 7,800 | $ 7,800 | $ 18,400 |
Dividends Declared (Detail)
Dividends Declared (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Equity [Abstract] | |||||||||||
Declaration Date | Jun. 13, 2023 | Mar. 14, 2023 | Nov. 29, 2022 | Sep. 20, 2022 | Jun. 14, 2022 | Mar. 14, 2022 | Dec. 07, 2021 | Sep. 14, 2021 | |||
Record Date | Aug. 17, 2023 | May 18, 2023 | Feb. 16, 2023 | Nov. 17, 2022 | Aug. 18, 2022 | May 19, 2022 | Feb. 17, 2022 | Nov. 18, 2021 | |||
Payment Date | Sep. 14, 2023 | Jun. 08, 2023 | Mar. 09, 2023 | Dec. 08, 2022 | Sep. 08, 2022 | Jun. 09, 2022 | Mar. 10, 2022 | Dec. 09, 2021 | |||
Dividend Per Share | $ 0.68 | $ 0.68 | $ 0.68 | $ 0.68 | $ 0.62 | $ 0.62 | $ 0.62 | $ 0.62 | $ 2.72 | $ 2.48 | $ 2.24 |
Amount | $ 5,054 | $ 5,054 | $ 5,059 | $ 5,066 | $ 4,621 | $ 4,632 | $ 4,645 | $ 4,652 | $ 20,233 | $ 18,550 |
Summary of Changes in Accumulat
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | $ 166,542 | $ 141,988 | |
Other comprehensive income (loss) | (1,665) | (6,500) | $ (1,374) |
Balance, end of period | 206,223 | 166,542 | 141,988 |
Derivatives | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (13) | (19) | (38) |
Unrealized losses, net of tax | 34 | (57) | 34 |
Tax expense (benefit) included in provision for income taxes | 13 | (16) | 2 |
Amounts reclassified from accumulated other comprehensive income (loss) | (48) | 63 | (15) |
Other comprehensive income (loss) | (14) | 6 | 19 |
Balance, end of period | (27) | (13) | (19) |
Derivatives | Other Income (Expense), Net | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Reclassification adjustments for (gains) losses included in other income (expense), net | (61) | 79 | (17) |
Investments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (2,138) | 3,222 | 5,478 |
Unrealized losses, net of tax | (1,523) | (5,405) | (2,216) |
Tax expense (benefit) included in provision for income taxes | (20) | (12) | 13 |
Amounts reclassified from accumulated other comprehensive income (loss) | 79 | 45 | (50) |
Other comprehensive income (loss) | (1,444) | (5,360) | (2,266) |
Balance, end of period | (3,582) | (2,138) | 3,222 |
Investments | Cumulative effect of accounting changes | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | 0 | 0 | 10 |
Balance, end of period | 0 | 0 | |
Investments | Other Income (Expense), Net | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Reclassification adjustments for (gains) losses included in other income (expense), net | 99 | 57 | (63) |
Translation adjustments and other | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (2,527) | (1,381) | (2,254) |
Other comprehensive income (loss) | (207) | (1,146) | 873 |
Balance, end of period | (2,734) | (2,527) | (1,381) |
Accumulated other comprehensive income (loss) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (4,678) | 1,822 | 3,186 |
Other comprehensive income (loss) | (1,665) | (6,500) | (1,374) |
Balance, end of period | (6,343) | (4,678) | 1,822 |
Accumulated other comprehensive income (loss) | Cumulative effect of accounting changes | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | $ 0 | 0 | 10 |
Balance, end of period | $ 0 | $ 0 |
Summary of Changes in Accumul_2
Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Derivatives | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Unrealized losses, net of tax | $ 9 | $ (15) | $ 9 |
Net change related to other comprehensive income (loss), tax | (4) | 1 | 7 |
Investments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Unrealized losses, net of tax | (393) | (1,440) | (589) |
Net change related to other comprehensive income (loss), tax | (373) | (1,428) | (602) |
Translation adjustments and other | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Net change related to other comprehensive income (loss), tax | $ 0 | $ 0 | $ (9) |
Stock-Based Compensation Expens
Stock-Based Compensation Expense and Related Income Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Stock-based compensation expense | $ 9,611 | $ 7,502 | $ 6,118 |
Income tax benefits related to stock-based compensation | $ 1,651 | $ 1,293 | $ 1,065 |
Employee Stock and Savings Pl_3
Employee Stock and Savings Plans - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Billions | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Compensation Related Costs Disclosure [Line Items] | ||||
Retirement benefits for saving plans funded by employer | $ 1.6 | $ 1.4 | $ 1.2 | |
Stock Awards | ||||
Compensation Related Costs Disclosure [Line Items] | ||||
Unrecognized compensation costs | $ 18.6 | |||
Unrecognized compensation costs are expected to be recognized over a weighted average period (years) | 3 years | |||
Weighted average grant-date fair value | $ 252.59 | [1] | $ 291.22 | $ 221.13 |
Fair value of awards vested | $ 11.9 | $ 14.1 | $ 13.4 | |
Shares authorized for future grant | 164 | |||
Stock Awards | Lower Limit | ||||
Compensation Related Costs Disclosure [Line Items] | ||||
Award vest period | 4 years | |||
Stock Awards | Upper Limit | ||||
Compensation Related Costs Disclosure [Line Items] | ||||
Award vest period | 5 years | |||
Restricted Stock Units | Executive Incentive Plan | ||||
Compensation Related Costs Disclosure [Line Items] | ||||
Award vest period | 4 years | |||
Performance Stock Units | Executive Incentive Plan | ||||
Compensation Related Costs Disclosure [Line Items] | ||||
Award vest period | 3 years | |||
Employee Stock | ||||
Compensation Related Costs Disclosure [Line Items] | ||||
Shares authorized for future grant | 74 | |||
Percentage of market value at which employees are able to purchase shares of common stock | 90% | 90% | 90% | |
Maximum percentage of gross compensation at which employees may purchase shares | 15% | 15% | 15% | |
[1] Includes 1 million, 1 million, and 2 million of PSUs granted at target and performance adjustments above target levels for fiscal years 2023, 2022, and 2021, respectively. |
Assumptions Used in Estimating
Assumptions Used in Estimating the Fair Value of Stock Award Grants (Detail) - $ / shares | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |||
Interest rates minimum | 2% | 0.03% | 0.01% |
Interest rates maximum | 5.40% | 3.60% | 1.50% |
Lower Limit | |||
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |||
Dividends per share (quarterly amounts) | $ 0.62 | $ 0.56 | $ 0.51 |
Upper Limit | |||
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items] | |||
Dividends per share (quarterly amounts) | $ 0.68 | $ 0.62 | $ 0.56 |
Stock Plan Activity (Detail)
Stock Plan Activity (Detail) - Stock Awards - $ / shares shares in Millions | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |||
Shares | |||||
Nonvested balance, beginning of year | 93 | ||||
Granted | [1] | 56 | |||
Vested | (44) | ||||
Forfeited | (9) | ||||
Nonvested balance, end of year | 96 | 93 | |||
Weighted Average Grant-Date Fair Value | |||||
Nonvested balance, beginning of year | $ 227.59 | ||||
Granted | 252.59 | [1] | $ 291.22 | $ 221.13 | |
Vested | 206.90 | ||||
Forfeited | 239.93 | ||||
Nonvested balance, end of year | $ 250.37 | $ 227.59 | |||
[1] Includes 1 million, 1 million, and 2 million of PSUs granted at target and performance adjustments above target levels for fiscal years 2023, 2022, and 2021, respectively. |
Stock Plan Activity (Parentheti
Stock Plan Activity (Parenthetical) (Detail) - shares shares in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Performance Stock Units | |||
Share based Compensation Arrangement by Share based Payment Award [Line Items] | |||
Nonvested stock awards granted | 1 | 1 | 2 |
Employee Purchased Shares (Deta
Employee Purchased Shares (Detail) - $ / shares shares in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Shares purchased | 7 | 7 | 8 |
Average price per share | $ 245.59 | $ 259.55 | $ 207.88 |
Segment Revenue (Detail)
Segment Revenue (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 211,915 | $ 198,270 | $ 168,088 |
Productivity and Business Processes | |||
Segment Reporting Information [Line Items] | |||
Revenue | 69,274 | 63,364 | 53,915 |
Intelligent Cloud | |||
Segment Reporting Information [Line Items] | |||
Revenue | 87,907 | 74,965 | 59,728 |
More Personal Computing | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 54,734 | $ 59,941 | $ 54,445 |
Operating Income (Loss) by Segm
Operating Income (Loss) by Segment (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | |||
Operating Income (Loss) | $ 88,523 | $ 83,383 | $ 69,916 |
Productivity and Business Processes | |||
Segment Reporting Information [Line Items] | |||
Operating Income (Loss) | 34,189 | 29,690 | 24,351 |
Intelligent Cloud | |||
Segment Reporting Information [Line Items] | |||
Operating Income (Loss) | 37,884 | 33,203 | 26,471 |
More Personal Computing | |||
Segment Reporting Information [Line Items] | |||
Operating Income (Loss) | $ 16,450 | $ 20,490 | $ 19,094 |
Segment Information and Geogr_3
Segment Information and Geographic Data - Additional Information (Detail) | 12 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Sales to an individual customer | No sales to an individual customer or country other than the United States accounted for more than 10% of revenue for fiscal years 2023, 2022, or 2021. |
Revenue Classified by Major Geo
Revenue Classified by Major Geographic Areas (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 211,915 | $ 198,270 | $ 168,088 | |
United States | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | [1] | 106,744 | 100,218 | 83,953 |
Other Countries | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 105,171 | $ 98,052 | $ 84,135 | |
[1] Includes billings to OEMs and certain multinational organizations because of the nature of these businesses and the impracticability of determining the geographic source of the revenue. |
Revenue Classified by Significa
Revenue Classified by Significant Product and Service Offerings (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from External Customer [Line Items] | |||
Revenue | $ 211,915 | $ 198,270 | $ 168,088 |
Server Products and Cloud Services | |||
Revenue from External Customer [Line Items] | |||
Revenue | 79,970 | 67,350 | 52,589 |
Office Products and Cloud Services | |||
Revenue from External Customer [Line Items] | |||
Revenue | 48,728 | 44,862 | 39,872 |
Windows | |||
Revenue from External Customer [Line Items] | |||
Revenue | 21,507 | 24,732 | 22,488 |
Gaming | |||
Revenue from External Customer [Line Items] | |||
Revenue | 15,466 | 16,230 | 15,370 |
Revenue from External Customer [Line Items] | |||
Revenue | 15,145 | 13,816 | 10,289 |
Search and News Advertising | |||
Revenue from External Customer [Line Items] | |||
Revenue | 12,208 | 11,591 | 9,267 |
Enterprise Services | |||
Revenue from External Customer [Line Items] | |||
Revenue | 7,722 | 7,407 | 6,943 |
Devices | |||
Revenue from External Customer [Line Items] | |||
Revenue | 5,521 | 7,306 | 7,143 |
Dynamics | |||
Revenue from External Customer [Line Items] | |||
Revenue | 5,437 | 4,687 | 3,754 |
Other | |||
Revenue from External Customer [Line Items] | |||
Revenue | $ 211 | $ 289 | $ 373 |
Revenue Classified by Signifi_2
Revenue Classified by Significant Product and Service Offerings (Parenthetical) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue from External Customer [Line Items] | |||
Revenue | $ 211,915 | $ 198,270 | $ 168,088 |
Microsoft Cloud | |||
Revenue from External Customer [Line Items] | |||
Revenue | $ 111,600 | $ 91,400 | $ 69,100 |
Long-Lived Assets, Excluding Fi
Long-Lived Assets, Excluding Financial Instruments and Tax Assets, Classified by Location of Controlling Statutory Company (Detail) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Long-lived assets | $ 187,239 | $ 166,368 | $ 128,314 |
United States | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Long-lived assets | 114,380 | 106,430 | 76,153 |
Ireland | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Long-lived assets | 16,359 | 15,505 | 13,303 |
Other Countries | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Long-lived assets | $ 56,500 | $ 44,433 | $ 38,858 |