metadata
base_model: distilbert/distilroberta-base
library_name: sentence-transformers
pipeline_tag: sentence-similarity
tags:
- sentence-transformers
- sentence-similarity
- feature-extraction
- generated_from_trainer
- dataset_size:54
- loss:TripletLoss
widget:
- source_sentence: >-
PART I
Item 1A
# Legal, Regulatory, And Litigation Risks
Government enforcement under competition laws and new market regulation
may limit how we design and market our products. Government agencies
closely scrutinize us under U.S. and foreign competition laws.
Governments are actively enforcing competition laws and regulations and
enacting new regulations to intervene in digital markets, and this
includes markets such as the EU, the United Kingdom, the U.S., and China.
Some jurisdictions also allow competitors or consumers to assert claims of
anti-competitive conduct. U.S. and foreign antitrust authorities have
previously brought enforcement actions and continue to scrutinize our
business.
For example, the European Commission ("the Commission") has designated
Windows and LinkedIn as core platform services subject to obligations
under the EU Digital Markets Act, which prohibits certain
self-preferencing behaviors and places limitations on certain data use
among other obligations. The Commission also continues to closely
scrutinize the design of high-volume Microsoft products and the terms on
which we make certain technologies used in these products, such as file
formats, programming interfaces, and protocols, available to other
companies.
Flagship product releases such as Microsoft 365 and Windows can receive
significant scrutiny under EU or other competition laws.
Our portfolio of first-party devices continues to grow; at the same time,
our OEM partners offer a large variety of devices for our platforms. As a
result, we increasingly both cooperate and compete with our OEM partners,
creating a risk that we fail to do so in compliance with competition
rules. Regulatory scrutiny in this area may increase. Certain foreign
governments, particularly in China and other countries in Asia, have
advanced arguments under their competition laws that exert downward
pressure on royalties for our intellectual property.
Competition law enforcement actions and court decisions along with new
market regulations may result in fines or hinder our ability to provide
the benefits of our software to consumers and businesses, reducing the
attractiveness of our products and the revenue that comes from them. New
competition law actions or obligations under market regulation schemes
could be initiated, potentially using previous actions as precedent. The
outcome of such actions, or steps taken to avoid them, could adversely
affect us in a variety of ways, including causing us to withdraw products
from or modify products for certain markets, decreasing the value of our
assets, adversely affecting our ability to monetize our products, or
inhibiting our ability to consummate acquisition or impose conditions on
acquisitions that may reduce their value, which may adversely affect our
business, financial condition, and results of operations.
Laws and regulations relating to anti-corruption and trade could result in
increased costs, fines, criminal penalties, or reputational damage. The
Foreign Corrupt Practices Act ("FCPA") and other anti-corruption laws and
regulations ("Anti-Corruption Laws") prohibit corrupt payments by our
employees, vendors, or agents, and the accounting provisions of the FCPA
require us to maintain accurate books and records and adequate internal
controls. From time to time, we receive inquiries from authorities in the
U.S. and elsewhere which may be based on reports from employees and others
about our business activities outside the U.S. and our compliance with
AntiCorruption Laws. Periodically, we receive such reports directly and
investigate them, and also cooperate with investigations by U.S. and
foreign law enforcement authorities. An example of increasing
international regulatory complexity is the EU Whistleblower Directive,
initiated in 2021, which presents compliance challenges as it is
implemented in different forms by EU member states. Most countries in
which we operate also have competition laws that prohibit competitors from
colluding or otherwise attempting to reduce competition between
themselves. While we devote substantial resources to our U.S. and
international compliance programs and have implemented policies, training,
and internal controls designed to reduce the risk of corrupt payments and
collusive activity, our employees, partners, vendors, or agents may
violate our policies. Our failure to comply with Anti-Corruption Laws or
competition laws could result in significant fines and penalties, criminal
sanctions against us, our officers, or our employees, prohibitions on the
conduct of our business, and damage to our reputation, which could
adversely affect our business, financial condition, and results of
operations.
Increasing trade laws, policies, sanctions, and other regulatory
requirements also affect our operations in and outside the U.S. relating
to trade and investment. Economic sanctions in the U.S., the EU, and other
countries prohibit most business with restricted entities or countries.
U.S. export controls restrict Microsoft from offering many of its products
and services to, or making investments in, certain entities in specified
countries. U.S. import controls restrict us from integrating certain
information and communication technologies into our supply chain and allow
for government review of transactions involving information and
communications technology from countries determined to be foreign
PART I
Item 1A
adversaries. Supply chain regulations may impact the availability of goods
or result in additional regulatory scrutiny.
Periods of intense diplomatic or armed conflict, such as the ongoing
conflict in Ukraine, may result in (1) new and rapidly evolving sanctions
and trade restrictions, which may impair trade with sanctioned individuals
and countries, and (2) negative impacts to regional trade ecosystems among
our customers, partners, and us. Non-compliance with sanctions as well as
general ecosystem disruptions could result in reputational harm,
operational delays, monetary fines, loss of revenue, increased costs, loss
of export privileges, or criminal sanctions, which could adversely affect
our business, financial condition, and results of operations.
Laws and regulations relating to the handling of personal data may impede
the adoption of our services or result in increased costs, legal claims,
fines against us, or reputational damage. The growth of our Internetand
cloud-based services internationally relies increasingly on the movement
of data across national boundaries.
Legal requirements relating to the collection, storage, handling, and
transfer of personal data continue to evolve. For example, while the
EU-U.S. Data Privacy Framework ("DPF") has been recognized as adequate
under EU law to allow transfers of personal data from the EU to certified
companies in the U.S., the DPF is subject to further legal challenge which
could cause the legal requirements for data transfers from the EU to be
uncertain. EU data protection authorities have and may again block the use
of certain U.S.-based services that involve the transfer of data to the
U.S. In the EU and other markets, potential new rules and restrictions on
the flow of data across borders could increase the cost and complexity of
delivering our products and services. In addition, the EU General Data
Protection Regulation ("GDPR"), which applies to all of our activities
conducted from an establishment in the EU or related to products and
services offered in the EU, imposes a range of compliance obligations
regarding the handling of personal data. More recently, the EU has been
developing new requirements related to the use of data, including in the
Digital Markets Act, the Digital Services Act, and the Data Act, that add
additional rules and restriction on the use of data in our products and
services. Engineering efforts to build and maintain capabilities to
facilitate compliance with these laws involve substantial expense and the
diversion of engineering resources from other projects. We might
experience reduced demand for our offerings if we are unable to engineer
products that meet our legal duties or help our customers meet their
obligations under these and other data regulations, or if our
implementation to comply makes our offerings less attractive. Compliance
with these obligations depends in part on how particular regulators
interpret and apply them. If we fail to comply, or if regulators assert we
have failed to comply (including in response to complaints made by
customers), it may lead to regulatory enforcement actions, which can
result in significant monetary penalties, private lawsuits, reputational
damage, blockage of product offerings or of international data transfers,
and loss of customers. The highest fines assessed under GDPR have recently
been increasing, especially against large technology companies, and
European data protection authorities have taken action to block or remove
services from their markets. Jurisdictions around the world, such as
China, India, and states in the U.S.
have adopted, or are considering adopting or expanding, laws and
regulations imposing obligations regarding the collection, handling, and
transfer of personal data.
Our investment in gaining insights from data is becoming central to the
value of the services we deliver to customers, including AI services, to
operational efficiency and key opportunities in monetization, and to
customer perceptions of quality. Our ability to use data in this way may
be constrained by regulatory developments that impede realizing the
expected return from this investment. Ongoing legal analyses, reviews, and
inquiries by regulators of Microsoft practices, or relevant practices of
other organizations, may result in burdensome or inconsistent
requirements, including data sovereignty and localization requirements,
affecting the location, movement, collection, and use of our customer and
internal employee data as well as the management of that data. Compliance
with applicable laws and regulations regarding personal data may require
changes in services, business practices, or internal systems that result
in increased costs, lower revenue, reduced efficiency, or greater
difficulty in competing with foreign-based firms. Compliance with data
regulations might limit our ability to innovate or offer certain features
and functionality in some jurisdictions where we operate. Failure to
comply with existing or new rules may result in significant penalties or
orders to stop the alleged noncompliant activity, negative publicity, and
diversion of management time and effort.
Existing and increasing legal and regulatory requirements could adversely
affect our results of operations.
We are subject to a wide range of laws, regulations, and legal
requirements in the U.S. and globally, including those that may apply to
our products and online services offerings, and those that impose
requirements related to user privacy, telecommunications, data storage and
protection, digital accessibility, advertising, and online content. Laws
in several jurisdictions, including EU Member State laws under the
European Electronic Communications Code, increasingly define certain of
our services as regulated telecommunications services. This trend may
continue and will result in these offerings being subject to additional
data protection, security, law enforcement surveillance, and other
obligations. Regulators and private litigants may assert that our
collection, use, and management of customer
sentences:
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```
PART II
Item 7
of derivatives that are not designated as hedging instruments are
primarily recognized in other income (expense),
net.
```
## Fiscal Year 2024 Compared With Fiscal Year 2023
Interest and dividends income increased due to higher yields. Interest
expense increased due to the issuance of commercial paper. Net recognized
losses on investments increased primarily due to higher equity impairments
and lower gains on equity investments. Net losses on derivatives decreased
primarily due to lower losses on equity derivatives. Other, net primarily
reflects net recognized losses on equity method investments.
## Income Taxes Effective Tax Rate
Our effective tax rate for fiscal years 2024 and 2023 was 18% and 19%,
respectively. The decrease in our effective tax rate was primarily due to
tax benefits from tax law changes, including the impact from the issuance
of Notice 2023-55 and Notice 2023-80 by the Internal Revenue Service
("IRS") and U.S. Treasury Department. Notice 202355, issued in the first
quarter of fiscal year 2024, delayed the effective date of final foreign
tax credit regulations to fiscal year 2024 for Microsoft. Notice 2023-80,
issued in the second quarter of fiscal year 2024, further delayed the
effective date of final foreign tax credit regulations indefinitely.
Our effective tax rate was lower than the U.S. federal statutory rate,
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 mix of income before income taxes between the U.S. and foreign
countries impacted our effective tax rate as a result of the geographic
distribution of, and customer demand for, our products and services. In
fiscal year 2024, our U.S. income before income taxes was $62.9 billion
and our foreign income before income taxes was $44.9 billion. In fiscal
year 2023, our U.S. income before income taxes was $52.9 billion and our
foreign income before income taxes was $36.4 billion.
The Organisation for Economic Co-operation and Development ("OECD")
published its model rules "Tax Challenges Arising From the Digitalisation
of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)" which
established a global minimum corporate tax rate of 15% for certain
multinational enterprises. Many countries have implemented or are in the
process of implementing the Pillar Two legislation, which will apply to
Microsoft beginning in fiscal year 2025. While we do not currently
estimate a material impact to our consolidated financial statements, we
continue to monitor the impact as countries implement legislation and the
OECD provides additional guidance.
## Uncertain Tax Positions
We remain under audit by the IRS for tax years 2014 to 2017. With respect
to the audit for tax years 2004 to 2013, on September 26, 2023, we
received Notices of Proposed Adjustment ("NOPAs") from the IRS. The
primary issues in the NOPAs relate to intercompany transfer pricing. In
the NOPAs, the IRS is seeking an additional tax payment of
$28.9 billion plus penalties and interest. As of June 30, 2024, we believe
our allowances for income tax contingencies are adequate. We disagree with
the proposed adjustments and will vigorously contest the NOPAs through the
IRS's administrative appeals office and, if necessary, judicial
proceedings. 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 income 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 2023, 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.
## Non-Gaap Financial Measures
Adjusted gross margin, operating income, net income, and diluted EPS are
non-GAAP financial measures. Prior year non-GAAP financial measures
exclude the impact of the Q2 charge, which includes employee severance
expenses,
PART II
Item 7 impairment charges resulting from changes to our hardware
portfolio, and costs related to lease consolidation activities. We believe
these non-GAAP measures aid investors by providing additional insight into
our operational performance and help clarify trends affecting our
business. For comparability of reporting, management considers non-GAAP
measures in conjunction with GAAP financial results in evaluating business
performance. These nonGAAP financial measures presented should not be
considered a substitute for, or superior to, the measures of financial
performance prepared in accordance with GAAP.
The following table reconciles our financial results reported in
accordance with GAAP to non-GAAP financial results:
|
| | Percentage | | | |
|-----------------------------------------------------------------------|-----------------|--------------|---------|--------|-----|
| (In millions, except percentages and per share amounts) |
2024 | 2023 | Change | | |
| Gross margin |
$ 171,008 | $ | 146,052 | 17% | |
| Severance, hardware-related impairment, and lease consolidation costs |
0 | 152 | * | | |
| Adjusted gross margin (non-GAAP) |
$ 171,008 | $ | 146,204 | 17% | |
| Operating income |
$ 109,433 | $ | 88,523 | 24% | |
| Severance, hardware-related impairment, and lease consolidation costs |
0 | 1,171 | * | | |
| Adjusted operating income (non-GAAP) |
$ 109,433 | $ | 89,694 | 22% | |
| Net income |
$ | 88,136 | $ | 72,361 | 22% |
| Severance, hardware-related impairment, and lease consolidation costs |
0 | 946 | * | | |
| Adjusted net income (non-GAAP) |
$ | 88,136 | $ | 73,307 | 20% |
| Diluted earnings per share |
$ | 11.80 | $ | 9.68 | 22% |
| Severance, hardware-related impairment, and lease consolidation costs |
0 | 0.13 | * | | |
| Adjusted diluted earnings per share (non-GAAP) |
$ | 11.80 | $ | 9.81 | 20% |
| * |
Not meaningful. | | | | |
## Liquidity And Capital Resources
We expect existing cash, cash equivalents, short-term investments, cash
flows from operations, and access to capital markets to continue to be
sufficient to fund our operating activities and cash commitments for
investing and financing activities, such as dividends, share repurchases,
debt maturities, material capital expenditures, and the transition tax
related to the Tax Cuts and Jobs Act ("TCJA"), for at least the next 12
months and thereafter for the foreseeable future.
## Cash, Cash Equivalents, And Investments
Cash, cash equivalents, and short-term investments totaled $75.5 billion
and $111.3 billion as of June 30, 2024 and 2023, respectively. Equity and
other investments were $14.6 billion and $9.9 billion as of June 30, 2024
and 2023, respectively. Our short-term investments are primarily intended
to facilitate liquidity and capital preservation. They consist
predominantly of highly liquid investment-grade fixed-income securities,
diversified among industries and individual issuers. The investments are
predominantly U.S. dollar-denominated securities, but also include foreign
currency-denominated securities to diversify risk. Our fixed-income
investments are exposed to interest rate risk and credit risk. The credit
risk and average maturity of our fixed-income portfolio are managed to
achieve economic returns that correlate to certain fixed-income indices.
The settlement risk related to these investments is insignificant given
that the short-term investments held are primarily highly liquid
investment-grade fixed-income securities.
Valuation
sentences:
- '`'
- '#'
- l
- source_sentence: >-
```
PART II
Item 7
Note 16 - Stockholders' Equity of the Notes to Financial Statements (Part
II, Item 8 of this Form 10-K) for further
discussion.
```
## Dividends
During fiscal years 2024 and 2023, our Board of Directors declared
dividends totaling $22.3 billion and $20.2 billion, respectively. We
intend to continue returning capital to shareholders in the form of
dividends, subject to declaration by our Board of Directors. Refer to Note
16 - Stockholders' Equity of the Notes to Financial Statements (Part II,
Item 8 of this Form 10-K) for further discussion.
## Other Planned Uses Of Capital
We will continue to invest in sales, marketing, product support
infrastructure, and existing and advanced areas of technology, as well as
acquisitions that align with our business strategy. Additions to property
and equipment will continue, including new facilities, datacenters, and
computer systems for research and development, sales and marketing,
support, and administrative staff. We expect capital expenditures to
increase in coming years to support growth in our cloud offerings and our
investments in AI infrastructure and training. We have operating and
finance leases for datacenters, corporate offices, research and
development facilities, Microsoft Experience Centers, and certain
equipment. We have not engaged in any related party transactions or
arrangements with unconsolidated entities or other persons that are
reasonably likely to materially affect liquidity or the availability of
capital resources.
## Recent Accounting Guidance
Refer to Note 1 - Accounting Policies of the Notes to Financial Statements
(Part II, Item 8 of this Form 10-K) for further discussion.
## Critical Accounting Estimates
Our consolidated financial statements and accompanying notes are prepared
in accordance with GAAP. Preparing consolidated financial statements
requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. Critical
accounting estimates are those estimates that involve a significant level
of estimation uncertainty and could have a material impact on our
financial condition or results of operations. We have critical accounting
estimates in the areas of revenue recognition, impairment of investment
securities, goodwill, research and development costs, legal and other
contingencies, income taxes, and business combinations - valuation of
intangible assets.
## Revenue Recognition
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 standalone selling price ("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.
PART II
Item 7 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.
## Impairment Of Investment Securities
We review debt investments quarterly for credit losses and impairment. 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. This
determination requires significant judgment. In making this judgment, we
employ a systematic methodology that considers available quantitative and
qualitative evidence in evaluating potential impairment of our
investments. 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 without readily determinable fair values are written
down to fair value if a qualitative assessment indicates that the
investment is impaired and the fair value of the investment is less than
carrying value. We perform a qualitative assessment on a periodic basis.
We are required to estimate the fair value of the investment to determine
the amount of the impairment loss. Once an investment is determined to be
impaired, an impairment charge is recorded in other income (expense),
net.
## Goodwill
We allocate goodwill to reporting units based on the reporting unit
expected to benefit from the business combination. We evaluate our
reporting units on an annual basis and, if necessary, reassign goodwill
using a relative fair value allocation approach. 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. These events or circumstances could include a significant change in
the business climate, legal factors, operating performance indicators,
competition, or sale or disposition of a significant portion of a
reporting unit.
Application of the goodwill impairment test requires judgment, including
the identification of reporting units, assignment of assets and
liabilities to reporting units, assignment of goodwill to reporting units,
and determination of the fair value of each reporting unit. The fair value
of each reporting unit is estimated primarily through the use of a
discounted cash flow methodology. This analysis requires significant
judgments, including estimation of future cash flows, which is dependent
on internal forecasts, estimation of the long-term rate of growth for our
business, estimation of the useful life over which cash flows will occur,
and determination of our weighted average cost of capital.
The estimates used to calculate the fair value of a reporting unit change
from year to year based on operating results, market conditions, and other
factors. Changes in these estimates and assumptions could materially
affect the determination of fair value and goodwill impairment for each
reporting unit.
sentences:
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- '`'
- source_sentence: >-
| Less than 12 Months | 12 Months or
Greater | Total | | | | |
| | | | |
|-------------------------------------------------------|------------------------|---------|------------|--------|--------|-----------|-----------|-----------|---------|---------|---------|
| Unrealized |
Unrealized | Total | Unrealized | |
| | | | | | |
| (In millions) | Fair
Value | Losses | | | |
| | | | | |
| Losses | Fair
Value | Losses | Fair Value | | |
| | | | | |
| June 30, 2024 U.S. government and agency securities $ | 529
$ | (12) | $ | 45,821 | $ | (2,936) $ |
46,350 | $ | (2,948) | | |
| Foreign government bonds |
79 | (2) | 180 | (14) | 259 |
(16) | | | | | |
| Mortgage- and asset-backed securities |
201 | (1) | 409 | (34) | 610 |
(35) | | | | | |
| Corporate notes and bonds |
1,310 | (9) | 5,779 | (310) | 7,089 |
(319) | | | | | |
| Municipal securities |
38 | (1) | 243 | (29) | 281 |
(30) | | | | | |
| Total |
$ | 2,157 | $ | (25) | $ |
52,432 | $ | (3,323) $ | 54,589 | $ | (3,348) |
| Less than 12 Months | 12 Months or
Greater | Total | | | | |
| | | | |
| Unrealized |
Unrealized | Total | Unrealized | |
| | | | | | |
| (In millions) | Fair
Value | Losses | | | |
| | | | | |
| Losses | Fair
Value | Losses | Fair Value | | |
| | | | | |
| 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) |
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.
| | Adjusted | Estimated |
| |
|---------------------------------------|------------|-------------|-------|--------|
| (In millions) | Cost Basis | Fair Value |
| |
| June 30, 2024 Due in one year or less | $ | 19,815 | $
| 19,596 |
| Due after one year through five years | 38,954 | 36,779 |
| |
| Due after five years through 10 years | 8,028 | | 7,242
| |
| Due after 10 years | 1,412 | | 1,282
| |
| Total | $ | 68,209 | $
| 64,899 |
## Debt Investment Maturities
The following table outlines maturities of our debt investments as of June
30, 2024:
## 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.
PART II
Item 8
## 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 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, 2024, our longterm 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:
|
| June 30, | June 30, | |
|----------------------------------------------------------------------------|------------|------------|-------|
| (In
millions)
| | 2024 | 2023 |
| Designated as Hedging Instruments Foreign exchange contracts
purchased | $ | 1,492 $ | 1,492 |
| Interest rate contracts
purchased | 1,100 |
1,078 | |
| Not Designated as Hedging Instruments Foreign exchange contracts
purchased | 7,167 | 7,874 | |
| Foreign exchange contracts
sold | 31,793 | 25,159
| |
| Equity contracts
purchased | 4,016 |
3,867 | |
| Equity contracts
sold | 2,165 |
2,154 | |
sentences:
- P
- S
- '|'
- source_sentence: >-
PART II
Item 8 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 multiyear on-premises licenses that
are invoiced annually with revenue recognized upfront.
As of June 30, 2024 and 2023, long-term accounts receivable, net of
allowance for doubtful accounts, was $4.9 billion and $4.5 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.
| (In millions) June 30, | 2024 |
2023 | 2022 | | |
|-------------------------------------------------------------|--------|--------|--------|----|-----|
| Accounts receivable, net of allowance for doubtful accounts | $ |
830 $ | 650 | $ | 633 |
| Other long-term assets | 54 |
66 | 77 | | |
| Total | $ |
884 $ | 716 | $ | 710 |
| (In millions) Year Ended June 30, | 2024 |
2023 | 2022 | | | |
|-------------------------------------|----------------------------|--------|--------|-------|----|-----|
| Balance, beginning of period | $ |
716 | $ | 710 | $ | 798 |
| | Charged to costs and other |
386 | 258 | 157 | | |
| | Write-offs |
(218) | (252) | (245) | | |
| Balance, end of period | $ |
884 | $ | 716 | $ | 710 |
As of June 30, 2024 and 2023, other receivables related to activities to
facilitate the purchase of server components were $10.5 billion and $9.2
billion, respectively, and are included in other current assets in our
consolidated balance sheets.
We record financing receivables when we offer certain 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, 2024
and 2023, our financing receivables, net were $4.5 billion and $5.3
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.
sentences:
- i
- P
- P
SentenceTransformer based on distilbert/distilroberta-base
This is a sentence-transformers model finetuned from distilbert/distilroberta-base. It maps sentences & paragraphs to a 768-dimensional dense vector space and can be used for semantic textual similarity, semantic search, paraphrase mining, text classification, clustering, and more.
Model Details
Model Description
- Model Type: Sentence Transformer
- Base model: distilbert/distilroberta-base
- Maximum Sequence Length: 512 tokens
- Output Dimensionality: 768 tokens
- Similarity Function: Cosine Similarity
Model Sources
- Documentation: Sentence Transformers Documentation
- Repository: Sentence Transformers on GitHub
- Hugging Face: Sentence Transformers on Hugging Face
Full Model Architecture
SentenceTransformer(
(0): Transformer({'max_seq_length': 512, 'do_lower_case': False}) with Transformer model: RobertaModel
(1): Pooling({'word_embedding_dimension': 768, 'pooling_mode_cls_token': False, 'pooling_mode_mean_tokens': True, 'pooling_mode_max_tokens': False, 'pooling_mode_mean_sqrt_len_tokens': False, 'pooling_mode_weightedmean_tokens': False, 'pooling_mode_lasttoken': False, 'include_prompt': True})
)
Usage
Direct Usage (Sentence Transformers)
First install the Sentence Transformers library:
pip install -U sentence-transformers
Then you can load this model and run inference.
from sentence_transformers import SentenceTransformer
# Download from the 🤗 Hub
model = SentenceTransformer("sidddddddddddd/alpha-street-distilroberta-base-sentence-transformer")
# Run inference
sentences = [
'PART II\n\nItem 8 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. \n\nIn 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. \n\nDue 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. \n\nOur 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.\n\n## Contract Balances And Other Receivables\n\nTiming 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.\n\nFor 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. \n\nUnearned revenue comprises mainly unearned revenue related to volume licensing programs, which may include SA\n\nand 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. \n\nRefer to Note 13 - Unearned Revenue for further information, including unearned revenue by segment and changes in unearned revenue during the period.\n\nPayment 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 multiyear on-premises licenses that are invoiced annually with revenue recognized upfront.\n\nAs of June 30, 2024 and 2023, long-term accounts receivable, net of allowance for doubtful accounts, was $4.9 billion and $4.5 billion, respectively, and is included in other long-term assets in our consolidated balance sheets.\n\nThe 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. \n\n\n\n| (In millions) June 30, | 2024 | 2023 | 2022 | | |\n|-------------------------------------------------------------|--------|--------|--------|----|-----|\n| Accounts receivable, net of allowance for doubtful accounts | $ | 830 $ | 650 | $ | 633 |\n| Other long-term assets | 54 | 66 | 77 | | |\n| Total | $ | 884 $ | 716 | $ | 710 |\n\n| (In millions) Year Ended June 30, | 2024 | 2023 | 2022 | | | |\n|-------------------------------------|----------------------------|--------|--------|-------|----|-----|\n| Balance, beginning of period | $ | 716 | $ | 710 | $ | 798 |\n| | Charged to costs and other | 386 | 258 | 157 | | |\n| | Write-offs | (218) | (252) | (245) | | |\n| Balance, end of period | $ | 884 | $ | 716 | $ | 710 |\n\nAs of June 30, 2024 and 2023, other receivables related to activities to facilitate the purchase of server components were $10.5 billion and $9.2 billion, respectively, and are included in other current assets in our consolidated balance sheets.\n\nWe record financing receivables when we offer certain 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, 2024 and 2023, our financing receivables, net were $4.5 billion and $5.3 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.\n\n## Assets Recognized From Costs To Obtain A Contract With A Customer\n\nWe 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. \n\nWe 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.\n\n## Cost Of Revenue\n\nCost 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.',
'P',
'i',
]
embeddings = model.encode(sentences)
print(embeddings.shape)
# [3, 768]
# Get the similarity scores for the embeddings
similarities = model.similarity(embeddings, embeddings)
print(similarities.shape)
# [3, 3]
Training Details
Training Dataset
Unnamed Dataset
- Size: 54 training samples
- Columns:
sentence_0,sentence_1, andsentence_2 - Approximate statistics based on the first 54 samples:
sentence_0 sentence_1 sentence_2 type string string string details - min: 49 tokens
- mean: 495.98 tokens
- max: 512 tokens
- min: 2 tokens
- mean: 2.87 tokens
- max: 3 tokens
- min: 3 tokens
- mean: 3.0 tokens
- max: 3 tokens
- Samples:
sentence_0 sentence_1 sentence_2 # Microsoft Quarterly Highlights, Product Releases And Enhancements
## Fy24 Q4
Every quarter Microsoft delivers hundreds of products, either as new releases or services or as enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.
Following are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.
## Microsoft 365 Consumer/Commercial
Access Copilot directly in new Outlook for Windows and web is the same Microsoft Copilot experience users get from the Microsoft Teams app, at copilot.microsoft.com
(Work mode), and other places but is now available from within Microsoft Outlook for Windows and web.
Interact with Copilot in the new Outlook for Windows and web allows users to ask questions or provide instructions directly inside Outlook. Users can type and receive responses from Copilot in a right-hand side panel that can be opened by the user by clicking on the Copilot icon in the top nav bar.
Access Copilot directly in classic Outlook for Windows is the Microsoft Copilot experience users get in Microsoft Teams and copilot.microsoft.com (Work mode) but is now available from within classic Microsoft Outlook for Windows.
Coaching by Copilot in classic Outlook for Windows combines the power of LLMs and Outlook data to coach users on how to best get their message across.
Draft by Copilot in classic Outlook for Windows combines the power of LLMs and Outlook data to help users draft new messages or replies.
Bing search integration brings the power of the web to chats in Word. Ask Copilot a question in Word chat and Copilot generates an answer using integrated Bing search, so users never have to leave the app. Available on web and Windows desktop.
Copilot in Loop is available in Loop components in Teams and Outlook. People with a Copilot License can now leverage Copilot in Loop when they paste Loop components into the Teams app, Outlook and Meeting Notes.
The Microsoft Copilot Academy is a new addition to Viva Learning designed to help customers effectively utilize Copilot experiences through guided upskilling. Learning content curated by Microsoft experts is organized into learning paths like "meet Copilot," "intro to prompts" and more.
The Microsoft Copilot Dashboard provides company leaders with out-of-the-box reports to understand and measure every stage of their Copilot transformation journey. This privacy-protected data spans across readiness, adoption, impact and user sentiment via survey response.
Copilot in Microsoft Viva Engage helps leaders create compelling and inspiring posts from simple prompts or trending topics within workplace communities and storyline conversations. Copilot offers suggestions to personalize messages with options to adjust tone and length and to suggest relevant images, all to help drive authenticity and engagement. Further, leaders can utilize Copilot to analyze engagement metrics, assess sentiment and recommend responses.
The new Copilot Deployment Kit in Viva Amplify helps organizations launch and roll out Copilot campaigns with ease. Teams can use prebuilt campaign templates to drive awareness and help employees learn what Copilot can do for them. It comes with eight predrafted communications that include videos, and guides that can easily be customized and sent to help users learn about Copilot.
ONA is a critical workplace analytics tool to help organizations better understand and improve how teams work together through collaboration, communication, change management and more. The ONA change management template enables analysts to conduct in-depth analysis to help understand how major organizational changes, such as a reorganization, large-scale transformation or shift in work modes impact collaboration behavior.
The solutions of the Microsoft Intune Suite help organizations improve their security posture, simplify IT and security operations, and reduce costs of managing and protecting their endpoint estate. Intune Suite and standalone solutions are now also generally available for customers in the United States federal, state, local and tribal governments, assisting them to meet the demands of the Executive Order to achieve a Zero Trust security model.
Microsoft Teams
Intelligent recap supports meetings with just transcription enabled, allowing people to enjoy AI-generated summaries for more types of meetings. Sometimes, meeting participants may choose to transcribe a meeting without recording it. In these cases, Teams Premium and Copilot for Microsoft 365 licensed users will be able to access AI-generated notes, AI-generated tasks, and name mentions after the meeting to catch up.
Intelligent call recap brings one of the best AI features in meetings to calling.
Intelligent call recap provides AI-powered insights and recaps of users' VoIP and PSTN calls in Teams. This feature is available for Teams Premium and Copilot for Microsoft 365 users.
Help keep confidential meetings protected with expanded controls for managing who can initiate transcription. Meeting organizers with eligible licenses can see a control called "Who can record and transcribe" in the meeting options, offering three choices: (1) organizers and co-organizers, or (2) organizers, co-organizers and presenters, or (3) no one. This way meeting organizers can manage which roles can initiate recording and transcription for a meeting.
Users can now instruct Copilot to adjust their draft message. To try it out, write a message in chat or channels, open Copilot beneath the message box in Teams, choose to adjust the message with a custom prompt, and type a prompt like "add a call to action" or "make it persuasive" or "convert my message into a list and add inclusive language."
In addition to accessing Copilot in Teams during a meeting on a mobile device, users can now access Copilot in Teams and ask questions about meetings after they end.
Just tap a Teams calendar item to access Copilot in the meeting "Details" or
"Recap" view. This is available for eligible meetings with transcription turned on.
When users get a message in a different language, they will see a suggestion to translate the message into their preferred language. Additionally, in translation settings, they can select which languages they don't want to translate and whether to translate messages automatically. These features reduce the need for manual translation or switching between apps.
Nearby conversations can interfere with Teams calls and meetings. Voice isolation is an AI-based advanced noise suppression feature that eliminates unwanted background noise, including other human voices. The technology recognizes a user's voice profile and ensures only their voice is transmitted. Voice isolation can be enabled for calls and meetings.
Zero-touch provisioning is a feature that allows users to deploy Microsoft Teams Rooms on Windows devices without any physical intervention at the site. It leverages Windows Autopilot and Auto-login technologies to automate the enrollment and configuration of the devices from the cloud, using the credentials stored in the Teams Rooms Pro Management service.
Users can extend the power and knowledge of Copilot in Teams meetings for sales organizations by enabling a plugin to connect to Copilot for Sales. With this plugin, Copilot can process conversations in real time and return insights to sellers, such as an overview of an account opportunity, based on the organization's Copilot for Sales data. Copilot can also suggest dynamic prompts for querying account information when sellers mention keywords and names during a discussion.
Frontline teams can harness the power of Copilot for Microsoft 365 with the new Shifts plugin. Both managers and workers can ask Copilot to show them their shifts schedule for their specific team, as well as open shifts and time off. With quick insights at their fingertips, frontline teams can manage schedules with more agility and speed so they can focus on critical tasks. Shifts plugin for Copilot is now generally available with both the Copilot for Microsoft 365 license as well as Microsoft Teams E and F-SKU licenses.
## Windows
The company announced a new category of Windows PCs designed for AI called Copilot+ PCs. Copilot+ PCs are the fastest, most intelligent Windows PCs ever built.
With powerful new silicon capable of an incredible 40+ TOPS (trillion operations per second), all-day battery life and access to the most advanced AI models, Copilot+
PCs will enable you to do things you can't on any other PC. Generate and refine AI
images in near real time directly on the device using Cocreator; bridge language barriers with Live Captions, translating audio from 40+ languages into English; and unlock more AI capabilities with first-party and third-party apps faster than ever. Introducing Copilot+ PCs - The Official Microsoft Blog.
Windows 365 Frontline is designed to meet the distinct needs of shift and part-time employees. With Windows 365 Frontline for FedRAMP, Cloud PCs are provisioned in an Azure Commercial datacenter and meet FedRAMP requirements when they are properly configured and used within CONUS.
Hibernation support in Azure Virtual Desktop is now generally available. Hibernating a session host virtual machine (VM) deallocates the machine while persisting the VMs in-memory state. When a VM hibernates, users only pay for storage and networking costs, not compute costs. When it restarts, users can quickly resume their work.
App attach for Azure Virtual Desktop allows IT admins to dynamically attach applications from an application package to a user session in Azure Virtual Desktop.
App attach is now generally available. The new UI for App Attach will be seen in the Azure Portal. Customers and partners should use the new App Attach application delivery approach going forward.
## Dynamics 365
Dynamics 365 Customer Insights enables users to ensure messages go to the right contact email address. Users can choose which of a contact's email addresses to target in their journeys. For example, some email messages may be more appropriate for a contact's work email address, whereas others may best target a personal email address. Users can also now use timeline highlights, which enable quick access to actionable record updates.#S<br><br>PART I<br><br>Item 1A<br><br>abusive activities through our cloud-based services, such as unauthorized account access, payment fraud, or terms of service violations including cryptocurrency mining or launching cyberattacks. While are committed to detecting and controlling such misuse of our cloud-based and AI services, our efforts may not be effective, and we may incur reputational damage or experience adverse impacts to our business and results of operations.<br><br>## Risks Relating To The Evolution Of Our Business<br><br>We make significant investments in products and services that may not achieve expected returns. We will continue to make significant investments in research, development, and marketing for existing products, services, and technologies. In addition, we are focused on developing new AI platform services and incorporating AI into existing products and services. We also invest in the development and acquisition of a variety of hardware for productivity, communication, and entertainment, including PCs, tablets, and gaming devices. Investments in new technology are speculative. Commercial success depends on many factors, including innovation, developer support, and effective distribution and marketing. If customers do not perceive our latest offerings as providing significant new functionality or other value, they may reduce their purchases of new software and hardware products or upgrades, unfavorably affecting revenue. We may not achieve significant revenue from new product, service, and distribution channel investments for several years, if at all. New products and services may not be profitable or may not achieve operating margins as high as we have experienced historically. We may not get engagement in certain features that drive post-sale monetization opportunities. Our data-handling practices across our products and services will continue to be under scrutiny. Perceptions of mismanagement, driven by regulatory activity or negative public reaction to our practices or product experiences, could negatively impact product and feature adoption. Developing new technologies is complex. It can require long development and testing periods. We could experience significant delays in new releases or significant problems in creating new products or services. These factors could adversely affect our business, financial condition, and results of operations. <br><br>Acquisitions, joint ventures, and strategic alliances may have an adverse effect on our business. We expect to continue making acquisitions and entering into joint ventures and strategic alliances as part of our long-term business strategy. For example, in March 2022 we completed our acquisition of Nuance Communications, Inc., and in October 2023 we completed our acquisition of Activision Blizzard, Inc. ("Activision Blizzard"). In January 2023 we announced the third phase of our OpenAI strategic partnership. Acquisitions and other transactions and arrangements involve significant challenges and risks, including that they do not advance our business strategy, that we get an unsatisfactory return on our investment, that they raise new compliance-related obligations and challenges, that we have difficulty integrating and retaining new employees, business systems, and technology, that they distract management from our other businesses, or that announced transactions may not be completed. If an arrangement fails to adequately anticipate changing circumstances and interests of a party, it may result in early termination or renegotiation of the arrangement. We also have limited ability to control or influence third parties with whom we have arrangements, which may impact our ability to realize the anticipated benefits. The success of these transactions and arrangements depend in part on our ability to leverage them to enhance our existing products and services or develop compelling new ones, as well as the acquired companies' ability to meet our policies and processes in areas such as data governance, privacy, and cybersecurity. It may take longer than expected to realize the full benefits from these transactions and arrangements, such as increased revenue or enhanced efficiencies, or the benefits may ultimately be smaller than we expected. In addition, an acquisition may be subject to challenge even after it has been completed. For example, the Federal Trade Commission continues to challenge our Activision Blizzard acquisition and could, if successful, alter or unwind the transaction. These events could adversely affect our business, operations, financial condition, and results of operations.<br><br>If our goodwill or amortizable intangible assets become impaired, we may be required to record a significant charge to earnings. We acquire other companies and intangible assets and may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangibles. We review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. We test goodwill for impairment at least annually. Factors that may be a change in circumstances, indicating that the carrying value of our goodwill or amortizable intangible assets may not be recoverable, include a decline in our stock price and market capitalization, reduced future cash flow estimates, and slower growth rates in industry segments in which we participate. We have in the past recorded, and may in the future be required to record, a significant charge in our consolidated financial statements during the period in which any impairment of our goodwill or amortizable intangible assets is determined, negatively affecting our results of operations.<br><br><br><br>
PART I
Item 1A
CYBERSECURITY, DATA PRIVACY, AND PLATFORM ABUSE RISKS
Cyberattacks and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or
harm to our reputation or competitive position.
```
## Security Of Our Information Technology
Threats to IT security can take a variety of forms. Individual and groups of hackers and sophisticated organizations, including state-sponsored organizations or nation-states, continuously undertake attacks that pose threats to our customers and our IT, and we have experienced cybersecurity incidents in which such actors have gained unauthorized access to our IT systems and data, including customer systems and data. These actors use a wide variety of methods, which include developing and deploying malicious software; exploiting known and potential vulnerabilities or intentionally designed processes in hardware, software, or other infrastructure to attack our products and services or gain access to our networks and datacenters; using social engineering techniques to induce our employees, users, partners, or customers to disclose sensitive information, such as passwords, or take other actions to gain access to our data or our users' or customers' data; or acting in a coordinated manner or conducting coordinated attacks. For example, as previously disclosed in our Form 8-K filed with the Securities and Exchange Commission on January 19, 2024 and amended on March 8, 2024, beginning in late November 2023, a nation-state associated threat actor used a password spray attack to compromise a legacy test account and, in turn, gain access to Microsoft email accounts. The threat actor used and may continue to use information it obtained to gain, or attempt to gain, unauthorized access to some of our source code repositories and internal systems, and the threat actor may utilize this information to otherwise adversely affect our business and results of operations. This incident has and may continue to result in harm to our reputation and customer relationships. Additionally, we may discover additional impacts of this or other incidents as part of our ongoing examination of this incident. Nation-state and statesponsored actors can sustain malicious activities for extended periods and deploy significant resources to plan and carry out attacks. Nation-state attacks against us, our customers, or our partners have and may continue to intensify during periods of intense diplomatic or armed conflict, such as the ongoing conflict in Ukraine. Cyber incidents and attacks, individually or in the aggregate, could adversely affect our financial condition, results of operations, competitive position, and reputation, or expose us to legal or regulatory risk.
Inadequate account security or organizational security practices, including those of companies we have acquired or those of the third parties we utilize, have resulted and may result in unauthorized access to our IT systems and data, including customer systems and data, in the future. For example, system administrators may fail to timely remove employee account access when no longer appropriate. Employees or third parties may intentionally compromise our or our users' security or systems or reveal confidential information. Malicious actors may employ the IT supply chain to introduce malware through software updates or compromised supplier accounts or hardware.
Cyberthreats are constantly evolving and becoming increasingly sophisticated and complex, increasing the difficulty of detecting and successfully defending against them. Threat actors may also utilize emerging technologies, such as AI and machine learning. We may have no current capability to detect certain vulnerabilities or new attack methods, which may allow them to persist in the environment over long periods of time. It may be difficult to determine the best way to investigate, mitigate, contain, and remediate the harm caused by a cyber incident. Such efforts may not be successful, and we may make errors or fail to take necessary actions. It is possible that threat actors may gain undetected access to other networks and systems after establishing a foothold on an internal system. Cyber incidents and attacks can have cascading impacts that unfold with increasing speed across our internal networks and systems, as well as those of our partners and customers. In addition, it may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to our customers, partners, regulators, and the public. Breaches of our facilities, network, or data security can disrupt the security of our systems and business applications, impair our ability to provide services to our customers and protect the privacy of their data, result in product development delays, compromise confidential or technical business information, result in theft or misuse of our intellectual property or other assets, subject us to ransomware attacks, require us to allocate more resources to improve technologies or remediate the impacts of attacks, or otherwise adversely affect our business. In addition, actions taken to remediate an incident could result in outages, data losses, and disruptions of our services.`oPART II
Item 7
## Research And Development Costs
Costs incurred internally in researching and developing a computer software product are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached after all high-risk development issues have been resolved through coding and testing. Generally, this occurs shortly before the products are released to production. The amortization of these costs is included in cost of revenue over the estimated life of the products.
## Legal And Other Contingencies
The outcomes of legal proceedings and claims brought against us are subject to significant uncertainty. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued by a charge to income if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. In determining whether a loss should be accrued we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our consolidated financial statements.
## Income Taxes
The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year, and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity's financial statements or tax returns. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accounting literature also provides guidance on derecognition of income tax assets and liabilities, classification of deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our consolidated financial statements.
## Business Combinations - Valuation Of Intangible Assets
Accounting for business combinations requires significant judgments when allocating the purchase price to the estimated fair values of assets acquired and liabilities assumed at the acquisition date. Determination of fair value involves estimates and assumptions which can be complex, most notably with respect to intangible assets. Critical estimates used in the valuation of intangible assets include, but are not limited to, the amount and timing of projected cash flows, useful lives, and discount rates. While management's estimates of fair value are based on assumptions that are believed to be reasonable, these assumptions are inherently uncertain as they pertain to forward-looking views of our business and market conditions. The judgments made in this valuation process could materially impact our consolidated financial statements.
## Statement Of Management'S Responsibility For Financial Statements
Management is responsible for the preparation of the consolidated financial statements and related information that are presented in this report. The consolidated financial statements, which include amounts based on management's estimates and judgments, have been prepared in conformity with accounting principles generally accepted in the United States of America.
The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition, and that the financial records are reliable for preparing consolidated financial statements and maintaining accountability for assets. These systems are augmented by written policies, an organizational structure providing division of responsibilities, careful selection and training of qualified personnel, and a program of internal audits.
The Company engaged Deloitte & Touche LLP, an independent registered public accounting firm, to audit and render an opinion on the consolidated financial statements and internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States).
The Board of Directors, through its Audit Committee, consisting solely of independent directors of the Company, meets periodically with management, internal auditors, and our independent registered public accounting firm to ensure that each is meeting its responsibilities and to discuss matters concerning internal controls and financial reporting. Deloitte & Touche LLP and the internal auditors each have full and free access to the Audit Committee.
Satya Nadella Chief Executive Officer Amy E. Hood Executive Vice President and Chief Financial Officer Alice L. Jolla Corporate Vice President and Chief Accounting Officer
# Item 7A. Quantitative And Qualitative Disclosures About Market Risk
## Risks
We are exposed to economic risk from foreign exchange rates, interest rates, credit risk, and equity prices. We use derivatives instruments to manage these risks, however, they may still impact our consolidated financial statements.
## 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 positions, including hedges. Principal currency exposures include the Euro, Japanese yen, British pound, Canadian dollar, and Australian dollar.
## Interest Rate
Securities held in our fixed-income portfolio are subject to different interest rate risks based on their maturities. We manage the average maturity of the fixed-income portfolio to achieve economic returns that correlate to certain global fixed-income indices.
## Credit
Our fixed-income portfolio is diversified and consists primarily of investment-grade securities. We manage credit exposures relative to broad-based indices to facilitate portfolio diversification.
## Equity
Securities held in our equity investments portfolio are subject to price risk.
## Sensitivity Analysis
The following table sets forth the potential loss in future earnings or fair values, including associated derivatives, resulting from hypothetical changes in relevant market rates or prices:(In millions) June 30, - Loss:
TripletLosswith these parameters:{ "distance_metric": "TripletDistanceMetric.EUCLIDEAN", "triplet_margin": 5 }
Training Hyperparameters
Non-Default Hyperparameters
per_device_train_batch_size: 16per_device_eval_batch_size: 16num_train_epochs: 10multi_dataset_batch_sampler: round_robin
All Hyperparameters
Click to expand
overwrite_output_dir: Falsedo_predict: Falseeval_strategy: noprediction_loss_only: Trueper_device_train_batch_size: 16per_device_eval_batch_size: 16per_gpu_train_batch_size: Noneper_gpu_eval_batch_size: Nonegradient_accumulation_steps: 1eval_accumulation_steps: Nonetorch_empty_cache_steps: Nonelearning_rate: 5e-05weight_decay: 0.0adam_beta1: 0.9adam_beta2: 0.999adam_epsilon: 1e-08max_grad_norm: 1num_train_epochs: 10max_steps: -1lr_scheduler_type: linearlr_scheduler_kwargs: {}warmup_ratio: 0.0warmup_steps: 0log_level: passivelog_level_replica: warninglog_on_each_node: Truelogging_nan_inf_filter: Truesave_safetensors: Truesave_on_each_node: Falsesave_only_model: Falserestore_callback_states_from_checkpoint: Falseno_cuda: Falseuse_cpu: Falseuse_mps_device: Falseseed: 42data_seed: Nonejit_mode_eval: Falseuse_ipex: Falsebf16: Falsefp16: Falsefp16_opt_level: O1half_precision_backend: autobf16_full_eval: Falsefp16_full_eval: Falsetf32: Nonelocal_rank: 0ddp_backend: Nonetpu_num_cores: Nonetpu_metrics_debug: Falsedebug: []dataloader_drop_last: Falsedataloader_num_workers: 0dataloader_prefetch_factor: Nonepast_index: -1disable_tqdm: Falseremove_unused_columns: Truelabel_names: Noneload_best_model_at_end: Falseignore_data_skip: Falsefsdp: []fsdp_min_num_params: 0fsdp_config: {'min_num_params': 0, 'xla': False, 'xla_fsdp_v2': False, 'xla_fsdp_grad_ckpt': False}fsdp_transformer_layer_cls_to_wrap: Noneaccelerator_config: {'split_batches': False, 'dispatch_batches': None, 'even_batches': True, 'use_seedable_sampler': True, 'non_blocking': False, 'gradient_accumulation_kwargs': None}deepspeed: Nonelabel_smoothing_factor: 0.0optim: adamw_torchoptim_args: Noneadafactor: Falsegroup_by_length: Falselength_column_name: lengthddp_find_unused_parameters: Noneddp_bucket_cap_mb: Noneddp_broadcast_buffers: Falsedataloader_pin_memory: Truedataloader_persistent_workers: Falseskip_memory_metrics: Trueuse_legacy_prediction_loop: Falsepush_to_hub: Falseresume_from_checkpoint: Nonehub_model_id: Nonehub_strategy: every_savehub_private_repo: Falsehub_always_push: Falsegradient_checkpointing: Falsegradient_checkpointing_kwargs: Noneinclude_inputs_for_metrics: Falseeval_do_concat_batches: Truefp16_backend: autopush_to_hub_model_id: Nonepush_to_hub_organization: Nonemp_parameters:auto_find_batch_size: Falsefull_determinism: Falsetorchdynamo: Noneray_scope: lastddp_timeout: 1800torch_compile: Falsetorch_compile_backend: Nonetorch_compile_mode: Nonedispatch_batches: Nonesplit_batches: Noneinclude_tokens_per_second: Falseinclude_num_input_tokens_seen: Falseneftune_noise_alpha: Noneoptim_target_modules: Nonebatch_eval_metrics: Falseeval_on_start: Falseuse_liger_kernel: Falseeval_use_gather_object: Falsebatch_sampler: batch_samplermulti_dataset_batch_sampler: round_robin
Framework Versions
- Python: 3.10.14
- Sentence Transformers: 3.2.1
- Transformers: 4.45.1
- PyTorch: 2.4.0
- Accelerate: 0.34.2
- Datasets: 3.0.1
- Tokenizers: 0.20.0
Citation
BibTeX
Sentence Transformers
@inproceedings{reimers-2019-sentence-bert,
title = "Sentence-BERT: Sentence Embeddings using Siamese BERT-Networks",
author = "Reimers, Nils and Gurevych, Iryna",
booktitle = "Proceedings of the 2019 Conference on Empirical Methods in Natural Language Processing",
month = "11",
year = "2019",
publisher = "Association for Computational Linguistics",
url = "https://arxiv.org/abs/1908.10084",
}
TripletLoss
@misc{hermans2017defense,
title={In Defense of the Triplet Loss for Person Re-Identification},
author={Alexander Hermans and Lucas Beyer and Bastian Leibe},
year={2017},
eprint={1703.07737},
archivePrefix={arXiv},
primaryClass={cs.CV}
}