June 8, 2015To: Satya Nadella, Microsoft Corporation, CEOAmy Hood, Microsoft Corporation, CFOKevin Turner, Microsoft Corporation, COOChris Suh, Microsoft Corporation, Director of PRFrom: Hannah KradenpothRe: Microsoft Financial Analyst Conference Overview

Thank you for the opportunity to present at the 2015 Microsoft Corporation (NASDAQ: MSFT) Financial Analyst Conference. It was an honor to report on such a successful company. We have outlined what was presented to shareholders at this year’s financial analyst conference.

As you are all aware, Microsoft has continued to strive as the number one software company in the world year after year. This past year Microsoft was voted the number two most valued company in the world by Forbes magazine. Microsoft continues to produce top of the line software and products so their customers can do and achieve more.

Business Strategy

Microsoft’s business strategy is to be the productivity and platform company for this mobile-first and cloud-first world. Empowering every person and organization on the planet to do more and achieve more. To do this Microsoft continues to build an incredible digital work and life experiences supported by our Cloud Operating System, the Devices Operating System, and Hardware platforms.

Building Strategy

To build on Microsoft’s strategy this year we implemented many different elements to continue to build Microsoft. First, we acquired Nokia’s devices and services business, creating an expanded Microsoft Devices group that includes Nokia phones, Xbox hardware, Surface, Perceptive Pixel products, and accessories. We announced Microsoft Office available in the Apple App store. The Office app is now one of the most downloaded apps with over 35 million downloads. We introduced Cortana, an intelligent personal assistant that learns your behaviors and habits to provide a better phone experience.

In addition, we announced the Surface Pro 3, the tablet that can replace your laptop. The Pro 3 features a 12” fully HD screen, three USB ports, adjustable kickstand, pen, and fully functional keyboard. This tablet supports all Microsoft software as well as Photoshop, which allows users to take their work on the road. This year we announced that Microsoft will be providing Windows licenses for zero dollars to any original equipment manufacturer creating a device smaller than nine inches. We wanted it to be easier for people to access Microsoft products to help them do and achieve more. Next, we continued to build on the Microsoft One Drive and Azure clouds.

Lastly, we announced the system update of Windows 10. This update will be free to users starting July 29, 2015. Windows 10 combines the strengths of Windows 7 and 8 to bring a familiar look that is easy to use. We brought back the expanded start menu with access to pins and favorites right from your home screen. The update will feature Microsoft Edge an all new browser experience. Users will be able to snap up to four apps at once, create notes directly onto websites, and will feature Cortana for easy navigating.

Financials

Looking back over this fiscal year, Microsoft continued to show steady growth. Revenues for year to date have shown a gradual increase, currently reporting $21.7 billion in quarter three of this year. This is up six percent from last years $20.4 billion in quarter three.

This graph (shown right) breaks down the segment revenue A large segment of our revenue comes from commercial licensing on various products including desktop and laptop. The next largest sector consists of devices and consumer licensing.

Our gross margin is currently at $14.6 billion for quarter three of 2015, which is a one percent increase from last years $14.4 billion. We are continuing to grow at a steady pace.

The diluted earnings per share (EPS) as show in graph (see left) has shown an increase. As you can see in quarter four of 2014 and quarter one of 2015 our diluted EPS dropped, but this is from our acquisition of Nokia devices and services.

The Next Generation

This year Microsoft worked relentlessly to create the first generation of virtual reality goggles. At the financial conference this year, we announced the next generation of virtual reality. Microsoft HoloLens 10enables HD holograms to come to life. Users can combine the real world with the virtual world for a mixed reality experience. The HoloLens 10 uses HoloNotes 10 in Skype to allow users to communicate directly with other users to complete tasks. The HoloLens 10 will feature Microsoft Edge allowing users to pin and create notes on webpages that can be shared using the Microsoft Cloud. Cortana will allow you to play and work hands free using voice commands. What sets HoloLens 10 apart is that you are able to connect to a data or Wi-Fi connection to take your Xbox live account, games, movies, and more on the go with you.

Takeaways

Microsoft is going to continue to innovate techonology and push boundaries to move forward in creating and providing the best possible products and services so our customers can do and achieve more.

Recommendations

My reccomendation for Microsoft Corporation is to make the Financial Conference a yearly event. Financial conferences like this allows stakeholders to see what is happening within the company and gives them an idea of what to expect. Stakeholders make up such a large part of the Microsoft team and it’s important to show them where their investments are being used.

References

Microsoft Company Information

http://www.microsoft.com/investor/annualreports/default.aspx

Financial Information

www.marketwatch.com

httpfinance.yahoo.com/q?s=msft&ql=1

Microsoft HoloLens

https://www.microsoft.com/microsoft-hololens/en-us