Microsoft Ireland reports pretax profits of €973m

Stronger revenue driven by hosting as company shifts focus to cloud

 Microsoft’s new campus in Leopardstown, Co. Dublin. Photograph: Naoise Culhane

Microsoft’s new campus in Leopardstown, Co. Dublin. Photograph: Naoise Culhane

 

Profits at Dublin-based Microsoft Ireland Operations Limited (MIOL) rose to $1.2 billion (€973 million) last year as the company reported stronger revenue driven by volume licensing and hosting services.

The Republic accounted for $338 million (€275 million) in turnover for the year, an increase from the $290 million (€236 million) in 2016. The rest of Europe, meanwhile, rose to $20.8 billion (€16.9 billion), compared to $20.56 billion (16.72 billion) a year earlier.

MIOL is the Microsoft subsidiary tasked with marketing, selling and distributing hardware and software to Europe, the Middle East and Africa.

Pretax profit of $1.2 billion (€973 million) for the year ended June 30th, 2017, was up from just over $1 billion (€810 million) year earlier. Net revenue at the company was 10 per cent higher compared with 2016, rising to $22.82 billion (€18.56 billion) in the fiscal year.

Operating profit rose to $1.1 billion (€890 million), up 12.5 per cent year on year.

Effective tax rate

MIOL’s effective tax rate for the year was 15.5 per cent, representing a $190 million (€155 million) payment, above the statutory rate due to non tax-deductible expenses that arose during the year. It paid dividends of $350 million (€284 million), down from $1.9 billion (€1.5 billion).

The company also noted $32.5 million (€26.4 million) due to long-term creditors, which relates to a dark fibre cable that was acquired in 2016 but not put into service. It will be returned to Hibernia Express over a three-year period.

The accounts show employee numbers climbed from the previous year, with an average of 895, but the current figure is closer to 1,500. In February 2017, Microsoft announced it would recruit 600 people for its inside sales team, and made a further announcement of 200 jobs in October last year.

New campus

Microsoft recently opened its new campus at 1 Microsoft Place in Leopardstown, Co Dublin. The 34,000sq m campus cost €134 million, and will house almost 2,000 staff. Among the attractions for the campus are an LED waterfall and digital lake, an indoor “mountain” and a “DreamSpace” for teaching the next generation about technology.

The move sees Microsoft bring most of its Irish staff under one roof; previously, staff were split among a number of buildings in Sandyford.

MIOL is one of the software giant’s Irish subsidiaries, with its operations here also including the unlimited company Microsoft Ireland Research, Flat Island Company, which licenses Microsoft software for use in Europe, the Middle East and Africa, and Round Island One.