01—Abstract
Summary
Summary of the 10-Q filed January 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Microsoft Corporation reported strong financial results for the second quarter of fiscal year 2024, ending December 30, 2023.
Total revenue grew 18% year-over-year to $62.02 billiona, driven by robust performance across all segments. The Intelligent Cloud segment saw a significant 20% revenue increase, largely fueled by Azure and other cloud services growing 30%. The Productivity and Business Processes segment also performed well, with a 13% revenue increase driven by Office 365 Commercial.
The More Personal Computing segment showed a 19% revenue increase, significantly boosted by the gaming division, which included the impact of the Activision Blizzard acquisition. Net income for the quarter rose by 33% to $21.87 billionb, translating to diluted earnings per share of $2.93, a 33% increase.
This strong performance reflects Microsoft's continued success in its cloud transition and strategic acquisitions. The company highlighted significant investments in AI infrastructure and the ongoing integration of Activision Blizzard, which is expected to drive future growth.
02—Key points
Key Highlights
- Total revenue increased 18% to $62.02 billion, exceeding analyst expectations.
- Intelligent Cloud revenue grew 20% to $25.88 billion, with Azure and other cloud services up 30%.
- Productivity and Business Processes revenue rose 13% to $19.25 billion, driven by Office 365 Commercial growth.
- More Personal Computing revenue increased 19% to $16.89 billion, significantly boosted by gaming following the Activision Blizzard acquisition.
- Net income surged 33% to $21.87 billion, demonstrating strong profitability.
- Diluted Earnings Per Share (EPS) grew 33% to $2.93.
- Microsoft Cloud revenue increased 24% to $33.7 billion, underscoring the success of its cloud strategy.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Microsoft Corp kept $0.35.
- Revenue$62.02B100.0%
- Cost of revenue−$19.62B31.6%
- Gross profit$42.40B68.4%
- Operating costs−$15.37B24.8%
- Operating income$27.03B43.6%
- Interest, other & tax−$5.16B8.3%
- Net income$21.87B35.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed January 30, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $62.02B$52.75B | +17.6% |
| Cost of Revenue | $19.62B$17.49B | +12.2% |
| Gross Profit | $42.40B$35.26B | +20.2% |
| R&D Expenses | $7.14B$6.84B | +4.4% |
| Operating Income | $27.03B$20.40B | +32.5% |
| Interest Expense | $909.00M$490.00M | +85.5% |
| Net Income | $21.87B$16.43B | +33.2% |
| EPS (Basic) | $2.94$2.20 | +33.6% |
| EPS (Diluted) | $2.93$2.20 | +33.2% |
| Shares Outstanding (Basic) | 7.43B7.45B | −0.3% |
| Shares Outstanding (Diluted) | 7.47B7.47B | −0.1% |
05—Questions
Frequently Asked Questions
What was Microsoft's total revenue for the quarter and how does it compare to the prior year?
Microsoft's total revenue for the quarter ended December 30, 2023, was $62.02 billion, an increase of 18% compared to $52.75 billion in the same period last year.
How did the Activision Blizzard acquisition impact the financial results?
The acquisition of Activision Blizzard, completed on October 13, 2023, significantly impacted the More Personal Computing segment. Xbox content and services revenue increased by 61%, with the acquisition contributing 55 percentage points to this growth. The financial results of Activision Blizzard are included in Microsoft's consolidated statements from the acquisition date.
What is the performance of Microsoft's cloud offerings, particularly Azure?
Microsoft Cloud revenue grew 24% to $33.7 billion for the quarter. Specifically, Azure and other cloud services revenue increased by 30%, demonstrating strong demand for Microsoft's cloud infrastructure and services.
What is the company's outlook regarding investments in AI?
The company is making significant investments in AI infrastructure to support the growing demand for AI services. This investment is noted as a factor that may temper the gross margin percentage in the short term, but is expected to drive future growth.
06—Continue