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MICROSOFT CORP 8-K Report, Financial Results (Apr 25, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed April 25, 2024
Period End
April 25, 2024
Security
MSFT
In the record · 2016–202610-K1110-Q328-K106

MSFT filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 106 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Dec ’16Dec ’16
  2. Leadership change8-K · May ’21May ’21
  3. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed April 25, 2024. Cited figures are marked; the original filing is the authoritative source.

Microsoft's 8-K furnishes a press release reporting results for the fiscal third quarter ended March 31, 2024 (Q3 FY2024).

Revenue rose 17% to $61.9 billiona, operating income rose 23% to $27.6 billion, and diluted EPS rose 20% to $2.94. Microsoft Cloud revenue reached $35.1 billion, up 23%, and Azure and other cloud services grew 31%. Operating margin was about 44.6% and net margin about 35.5%.

Growth was broad across the three segments: Intelligent Cloud up 21%b, Productivity and Business Processes up 12%, and More Personal Computing up 17%. Xbox content and services grew 62%, but that figure includes 61 points of net impact from the Activision Blizzard acquisition. Devices revenue fell 17%.

The company also returned $8.4 billionc to shareholders through buybacks and dividends. The release states that Microsoft will provide forward-looking guidance on the earnings call rather than in this filing. The balance sheet and cash flow data show a major strategic shift.

Nine-month acquisition spending was about $67.8 billiond, largely reflecting Activision, and goodwill rose from $67.9 billion to $119.2 billion. Intangible assets rose to $28.8 billion. Total cash and short-term investments fell from $111.3 billion to $80.0 billion, and short-term debt of $20.5 billion appeared.

Quarterly capital expenditures on property and equipment were $11.0 billion, up about 66% year over year, and nine-month capex reached $30.6 billion. Quarterly operating cash flow was $31.9 billion, up 31%. Free cash flow (operating cash flow less capex) was roughly $21.0 billion for the quarter.

Investors will likely focus on whether the rising AI-related infrastructure spending continues to convert into cloud revenue growth. Several items warrant monitoring. Other income and expense swung to a $854 million net expense from $321 million of income a year earlier, which reduced pre-tax growth relative to operating income.

The effective tax provision was about 17.9% for the quarter. The filing's forward-looking statements also flag risks including AI-related reputational and legal exposure, competition, cybersecurity, and regulatory scrutiny. Note that Item 2.02 states the information is furnished rather than filed, so it is not subject to Section 18 liability.

02—Key points

Key Highlights

  1. Revenue of $61.9B (+17% YoY) and operating income of $27.6B (+23% YoY); operating margin about 44.6%.
  2. Diluted EPS of $2.94 (+20% YoY); net income of $21.9B (+20% YoY).
  3. Microsoft Cloud revenue of $35.1B (+23% YoY); Azure and other cloud services grew 31%.
  4. Intelligent Cloud revenue of $26.7B (+21%) was the largest segment; Productivity and Business Processes grew 12% and More Personal Computing grew 17%.
  5. Quarterly capex of $11.0B (+66% YoY) and nine-month acquisitions of about $67.8B (largely Activision) lifted goodwill to $119.2B and short-term debt to $20.5B.
  6. Cash and short-term investments fell to $80.0B from $111.3B at fiscal year-end June 2023, while quarterly operating cash flow rose 31% to $31.9B.
  7. Microsoft returned $8.4B to shareholders in the quarter through buybacks and dividends; Microsoft 365 Consumer subscribers reached 80.8 million.

03—Questions

Frequently Asked Questions

  1. How strong was Microsoft's growth in the March 2024 quarter?

    Revenue grew 17% to $61.9B, operating income grew 23% to $27.6B, and diluted EPS grew 20% to $2.94. Constant-currency growth was essentially identical, indicating that currency movements had little effect on reported results this quarter.

  2. What drove results in the quarter?

    Azure and other cloud services grew 31%, Microsoft Cloud revenue reached $35.1B (+23%), and Dynamics 365 grew 23%. Search and news advertising excluding traffic acquisition costs grew 12%. Devices revenue declined 17%, and Xbox content and services growth of 62% was mostly due to the Activision acquisition.

  3. How is Microsoft spending its capital, and what does that mean for cash flow?

    Quarterly capex rose to $11.0B from $6.6B a year earlier, and nine-month capex totaled $30.6B. Operating cash flow of $31.9B covered this spending, leaving roughly $21.0B of free cash flow for the quarter. Cash and short-term investments declined from $111.3B at June 2023 to $80.0B, reflecting acquisition spending and the new $20.5B of short-term debt.

  4. Did the acquisitions change Microsoft's balance sheet?

    Yes. Goodwill rose to $119.2B from $67.9B, and intangible assets rose to $28.8B from $9.4B, largely reflecting the Activision Blizzard acquisition. Investors should watch future impairment risk, which the forward-looking statements list as a potential earnings risk.

  5. Does this filing include future guidance, and is the information filed or furnished?

    No guidance is included. Microsoft said it would provide forward-looking guidance on its earnings call and webcast. Under General Instruction B.2 of Form 8-K, the press release is furnished rather than filed, so it is not subject to Section 18 liability and is not incorporated by reference into registration statements unless specifically referenced.

04—Continue

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