01—Abstract
Summary
Summary of the 10-K filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Microsoft Corporation's (MSFT) 10-K filing for the fiscal year ended June 30, 2024, highlights robust growth, particularly in its cloud and AI offerings, signaling a strong trajectory fueled by digital transformation and artificial intelligence.
The company reported significant revenue increases across its segments, with Intelligent Cloud revenue growing 20%a driven by Azure, and Productivity and Business Processes revenue up 12%, bolstered by Office 365 Commercial. The More Personal Computing segment saw a 13% revenue increase, notably boosted by the Activision Blizzard acquisition contributing to Gaming revenue growth.
Microsoft continues to invest heavily in AI infrastructure and innovation, integrating AI across its product portfolio, which is expected to drive future growth and enhance customer value. The company's financial health remains strong, with substantial cash flows from operations and a commitment to returning capital to shareholders through dividends and share repurchases, alongside strategic investments in datacenter expansion and AI capabilities.
02—Key points
Key Highlights
- Microsoft Cloud revenue increased 23% to $137.4 billion, indicating strong demand for its cloud services.
- Intelligent Cloud segment revenue grew 20%, with Azure and other cloud services up 30%, underscoring Azure's dominance in AI and cloud computing.
- The acquisition of Activision Blizzard significantly boosted the Gaming segment, with Xbox content and services revenue increasing by 50%.
- Productivity and Business Processes segment revenue increased by 12%, driven by a 16% growth in Office 365 Commercial.
- Research and development expenses increased by 9%, reflecting continued investment in innovation, particularly in AI and cloud engineering.
- The company returned $8.4 billion to shareholders in the fourth quarter of fiscal year 2024 through share repurchases and dividends.
- Microsoft remains committed to AI development, integrating it across its product suite and investing in AI infrastructure, positioning itself for future growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Microsoft Corp kept $0.36.
- Revenue$245.12B100.0%
- Cost of revenue−$74.11B30.2%
- Gross profit$171.01B69.8%
- Operating costs−$61.58B25.1%
- Operating income$109.43B44.6%
- Interest, other & tax−$21.30B8.7%
- Net income$88.14B36.0%
Where FY2024 revenue went
$245.12B- Net income: $88.14B, 36% of revenue
- Cost of revenue: $74.11B, 30% of revenue
- Other operating costs: $32.06B, 13% of revenue
- R&D: $29.51B, 12% of revenue
- Interest, other & tax: $21.30B, 8.7% of revenue
Kept 36% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed July 30, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $245.12B$211.91B | +15.7% |
| Cost of Revenue | $74.11B$65.86B | +12.5% |
| Gross Profit | $171.01B$146.05B | +17.1% |
| R&D Expenses | $29.51B$27.20B | +8.5% |
| Operating Expenses | $61.58B$57.53B | +7.0% |
| Operating Income | $109.43B$88.52B | +23.6% |
| Interest Expense | $2.94B$1.97B | +49.1% |
| Net Income | $88.14B$72.36B | +21.8% |
| EPS (Basic) | $11.86$9.72 | +22.0% |
| EPS (Diluted) | $11.80$9.68 | +21.9% |
| Shares Outstanding (Basic) | 7.43B7.45B | −0.2% |
| Shares Outstanding (Diluted) | 7.47B7.47B | 0.0% |
05—Questions
Frequently Asked Questions
What is Microsoft's primary growth driver according to this filing?
Microsoft's primary growth driver is its Microsoft Cloud, which includes Azure and other cloud services, Office 365 Commercial, Dynamics 365, and LinkedIn. The company reported a 23% increase in Microsoft Cloud revenue to $137.4 billion for the fiscal year 2024, indicating strong demand and adoption across its cloud-based offerings.
How has the Activision Blizzard acquisition impacted Microsoft's financial results?
The acquisition of Activision Blizzard, completed in October 2023, has significantly impacted Microsoft's financial results, particularly in the More Personal Computing segment. Gaming revenue increased by 50% due to the acquisition, which shifted Activision Blizzard content from third-party to first-party. The acquisition contributed $5.7 billion to revenue and $1.4 billion to operating loss post-acquisition.
What is Microsoft's strategy regarding Artificial Intelligence (AI)?
Microsoft's strategy is centered on making AI broadly available and responsibly developed. The company is integrating AI, particularly generative AI, across its entire product portfolio, including its Copilot offerings. Significant investments are being made in AI infrastructure, research and development, and cloud engineering to support this strategy and drive innovation in AI-powered solutions.
How is Microsoft managing its cash and returning capital to shareholders?
Microsoft ended the fiscal year 2024 with substantial cash, cash equivalents, and short-term investments totaling $75.5 billion. The company returned $8.4 billion to shareholders in Q4 FY24 through share repurchases and dividends, demonstrating a continued commitment to shareholder returns. Approximately $10.3 billion remained under its authorized share repurchase program as of June 30, 2024.
06—Continue