Microsoft 3Q24 earnings press release

Rhea-AI Summary

Microsoft (MSFT) reported strong fiscal Q1 2025 results with revenue reaching $65.6 billion, up 16% year-over-year. Operating income increased 14% to $30.6 billion, while net income grew 11% to $24.7 billion. Microsoft Cloud revenue rose 22% to $38.9 billion. Notable segments include Intelligent Cloud revenue up 20% to $24.1 billion, with Azure growing 33%. Productivity and Business Processes revenue increased 12% to $28.3 billion. Xbox content services saw significant growth of 61%, driven by the Activision acquisition. The company returned $9.0 billion to shareholders through dividends and share repurchases.

Positive

• Revenue increased 16% to $65.6 billion
• Operating income grew 14% to $30.6 billion
• Microsoft Cloud revenue up 22% to $38.9 billion
• Azure cloud services revenue growth of 33%
• Xbox content services revenue increased 61%
• Dynamics 365 revenue growth of 18%
• $9.0 billion returned to shareholders

Negative

• Microsoft 365 Consumer growth slowed to 5%
• Windows OEM and Devices revenue showed minimal growth of 2%

Insights

Financial Analyst

Microsoft delivered outstanding Q1 FY25 results, showcasing robust growth across all segments. $65.6B in revenue represents a stellar 16% YoY increase, while operating income grew 14% to $30.6B. The standout performer was Azure, with cloud services revenue surging 33%, demonstrating Microsoft's dominance in the enterprise cloud market.

The Activision acquisition is already showing significant impact, driving Xbox content revenue up by 61%. Microsoft Cloud revenue reached $38.9B, growing 22% YoY, indicating strong enterprise adoption of their cloud solutions. The company maintains robust shareholder returns, distributing $9.0B through dividends and buybacks.

Particularly noteworthy is the 18% growth in Dynamics 365, showing strong penetration in the enterprise software market. These results reflect successful AI integration across product lines and sustained market leadership in cloud computing.

Tech Industry Analyst

Microsoft's strategic AI integration is yielding tangible results across its product portfolio. The 33% Azure growth indicates successful enterprise AI adoption and competitive advantages against rivals. The synergy between cloud infrastructure and AI capabilities is creating a powerful ecosystem that's difficult for competitors to replicate.

The Activision acquisition's immediate positive impact on gaming revenue demonstrates successful integration and market expansion. Microsoft's multi-cloud strategy and AI-first approach are resonating with enterprise customers, as evidenced by strong Microsoft 365 Commercial growth. The company's position in both consumer and enterprise segments remains robust, with AI innovations driving growth across all major business units.

REDMOND, Wash., Oct. 30, 2024 /PRNewswire/ -- Microsoft Corp. on Wednesday announced that fiscal year 2025 first-quarter financial results are available on its Investor Relations website. The direct link to the earnings press release is https://www.microsoft.com/en-us/Investor/earnings/FY-2025-Q1/press-release-webcast.

As previously announced, the company will host a conference call at 2:30 p.m. Pacific Time. A live webcast of the call can be accessed on Microsoft's Investor Relations website at https://www.microsoft.com/en-us/Investor/.   

Microsoft (Nasdaq "MSFT" @microsoft) creates platforms and tools powered by AI to deliver innovative solutions that meet the evolving needs of our customers. The technology company is committed to making AI available broadly and doing so responsibly, with a mission to empower every person and every organization on the planet to achieve more. 

 

REDMOND, Wash. — October 30, 2024 — Microsoft Corp. today announced the following results for the quarter ended September 30, 2024, as compared to the corresponding period of last fiscal year:

• Revenue was $65.6 billion and increased 16%
• Operating income was $30.6 billion and increased 14%
• Net income was $24.7 billion and increased 11% (up 10% in constant currency)
• Diluted earnings per share was $3.30 and increased 10%

“AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process," said Satya Nadella, chairman and chief executive officer of Microsoft. "We are expanding our opportunity and winning new customers as we help them apply our AI platforms and tools to drive new growth and operating leverage.”

“Strong execution by our sales teams and partners delivered a solid start to our fiscal year with Microsoft Cloud revenue of $38.9 billion, up 22% year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

Business Highlights

Revenue in Productivity and Business Processes was $28.3 billion and increased 12% (up 13% in constant currency), with the following business highlights:

• Microsoft 365 Commercial products and cloud services revenue increased 13% (up 14% in constant currency) driven by Microsoft 365 Commercial cloud revenue growth of 15% (up 16% in constant currency)
• Microsoft 365 Consumer products and cloud services revenue increased 5% (up 6% in constant currency) driven by Microsoft 365 Consumer cloud revenue growth of 6% (up 7% in constant currency)
• LinkedIn revenue increased 10% (up 9% in constant currency)
• Dynamics products and cloud services revenue increased 14% driven by Dynamics 365 revenue growth of 18% (up 19% in constant currency)

Revenue in Intelligent Cloud was $24.1 billion and increased 20% (up 21% in constant currency), with the following business highlights:

• Server products and cloud services revenue increased 23% driven by Azure and other cloud services revenue growth of 33% (up 34% in constant currency)

Revenue in More Personal Computing was $13.2 billion and increased 17%, with the following business highlights:

• Windows OEM and Devices revenue increased 2%
• Xbox content and services revenue increased 61% driven by 53 points of net impact from the Activision acquisition
• Search and news advertising revenue excluding traffic acquisition costs increased 18% (up 19% in constant currency)

Microsoft returned $9.0 billion to shareholders in the form of dividends and share repurchases in the first quarter of fiscal year 2025.

View original content to download multimedia:https://www.prnewswire.com/news-releases/microsoft-earnings-press-release-available-on-investor-relations-website-302292060.html

SOURCE Microsoft Corp.

FAQ

What was Microsoft's (MSFT) revenue in Q1 2025?

Microsoft reported revenue of $65.6 billion in Q1 2025, representing a 16% increase year-over-year.

How much did Microsoft's (MSFT) Azure cloud services grow in Q1 2025?

Azure and other cloud services revenue grew by 33% (34% in constant currency) in Q1 2025.

What was Microsoft's (MSFT) earnings per share in Q1 2025?

Microsoft's diluted earnings per share was $3.30, increasing 10% compared to the same period last year.

How much did Microsoft (MSFT) return to shareholders in Q1 2025?

Microsoft returned $9.0 billion to shareholders through dividends and share repurchases in Q1 2025.