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MATH YIELDS DYNAMICS REVS Featured

MicrosoftAt the end of January, this newsletter tiptoed around the math that suggests the annual revenue for Microsoft's Dynamics operations. But after running the basic algebraic formula through advisors (i.e., my daughter the math major), it appears Dynamics revenue annualizes to about $1.1 billion to $1.2 billion.

This is a bit off from the $2 billion listed on the LinkedIn profile of Kirill Tatarinov who formerly ran the Dynamics operations. In its financial statement for the second quarter ended December 31, Microsoft said Dynamics revenue was up 7 percent. To reiterate the calculations from the earlier newsletter, Dynamics falls under the reporting segment, Productivity and Business Processes, whose revenue increased by $692 million. Four businesses are in category and while Microsoft did not specify the increase for Dynamics, it did disclose the total for the other three add those together and subtract from $692 million and the Dynamics business registered a $19-million increase for most recently ended quarter. So if $19 million represents a 7-percent increase, solving for "x" shows Dynamics revenue for the quarter was $290 million, up from about $271 million in the second quarter of fiscal 2016. Those numbers were also run by a couple of industry observers who said the annualized total was about right. Why Microsoft would set up the numbers this way—disclosing enough to calculate what was not given—I don't know. I can only say, I have seen this happen before in SEC filings. It reminds me of the time about a decade ago when someone deliberately gave me the installed base numbers for all Dynamics products. These things happen and somebody had a reason for it, but we'll never know.

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