Microsoft Corporation (MSFT)

Gross profit margin

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Gross profit	US$ in thousands	146,052,000	135,620,000	115,856,000	96,937,000	82,933,000
Revenue	US$ in thousands	209,747,000	196,109,000	165,936,000	140,503,000	123,495,000
Gross profit margin		69.63%	69.16%	69.82%	68.99%	67.15%

June 30, 2023 calculation

Gross profit margin = Gross profit ÷ Revenue
= $146,052,000K ÷ $209,747,000K
= 69.63%

Microsoft Corporation's gross profit margin shows a consistent and healthy trend over the past five years. The gross profit margin, which represents the percentage of revenue remaining after accounting for the cost of goods sold, has been steadily improving, reaching 68.92% as of June 30, 2023, up from 65.90% in 2019. This indicates efficient cost management and pricing strategies, resulting in a higher proportion of revenue being retained as gross profit.

The increasing gross profit margin may be attributed to various factors, such as effective supply chain management, economies of scale, and a shift towards higher-margin products and services. Additionally, it suggests that Microsoft has been able to maintain or improve its pricing power while managing its production and distribution costs effectively.

Investors and stakeholders generally view an expanding gross profit margin positively, as it signifies the company's ability to generate more profit from each dollar of sales. However, it would be beneficial to compare this trend with industry benchmarks to assess Microsoft's competitive position and explore any potential areas for further improvement.

Overall, the consistent improvement in Microsoft's gross profit margin demonstrates the company's ability to efficiently generate profits from its core operations and reflects favorably on its financial management and competitive positioning in the technology industry.