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Satya Nadella, CEO, Microsoft Corp. , during an event with senior officials and CEOs in the East Room of the White House in Washington, D.C., United States, on Thursday, June 22, 2023.
Chris Cleponis | CNP | bloomberg | Getty Images
Microsoft CEO Satya Nadella told fellow executives and board members last year that the software company aims to reach $500 billion in revenue by fiscal 2030, more than double its current size.
The comments, which indicate annual revenue growth of at least 10%, appeared in a memo released Monday as part of Microsoft’s federal court hearing regarding its suspension. Activision Blizzard acquisition.
Microsoft, one of the most valuable companies in the world, is not inclined to make far-reaching financial projections into the future. In its most recent earnings call, the company provided guidance only with respect to the current period, which is the fourth quarter of the fiscal year.
In the latest disclosure, part of a 15-page memo with an accompanying 21-page document, Nadella said Microsoft aims to achieve its 2030 goal “by executing an evolving, growth-oriented strategy consistent with our enduring mission and culture.”
Nadella has also set expectations for shareholder returns, which come in the form of dividends and buybacks.
“We believe this ambition and approach will help us achieve in excess of 10% annual returns for our shareholders within this time frame,” Nadella wrote in the document dated June 7, 2022, weeks before the end of the fiscal year.
Nadella described a “20/20” goal that includes 20% year-over-year revenue growth and a 20% increase in operating income for fiscal 2022 and subsequent years. For 2022, Microsoft achieved 18% revenue growth to $198.27 billion in revenue, operating income growth of 19%.
In the memo, Nadella used the phrase Microsoft Plus to describe products aimed at consumers. But he said the main driver of growth is Microsoft Cloud, a term that refers to a wide range of products aimed at business customers, including Azure public cloud (which competes with Amazon web services and Google Cloud), parts of Microsoft 365 productivity software, and parts of LinkedIn.
“Our priority is to maintain above-market growth to extend our lead over GCP and close the gap with AWS,” Nadella wrote in the accompanying document.
The Federal Trade Commission is trying to stop Microsoft from buying game publisher Activision for $68.7 billion.
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