Microsoft Q4 2024 fiscal results have just arrived. The company reported $64.7 billion in revenue and a 15% increase, including a net income of $22 billion. That would put the company up by 10%, with Intelligent Cloud revenues hitting $28.5 billion with a 19% increase in revenue.
On the other hand, Surface revenue hasn’t been well for seven quarters straight, dipping another 11% this quarter. Xbox hardware revenue is also down, even though Xbox content and services, including Game Pass, surged by 61%. That’s a massive boost, largely thanks to Activision Blizzard contributing a whopping 58 points to the net impact.
Microsoft revealed that its subscriber base has grown to 34 million, which includes the Xbox Game Pass Core members. With the upcoming Xbox Game Pass Standard plan is set to replace the Xbox Game Pass for Console. Last year’s Modern Warfare 3 just hit Xbox Game Pass, with Call of Duty: Black Ops 6 set to join later this year.
Microsoft also launched the Copilot Plus PCs, powered by Qualcomm, and two new Surface devices, the Surface Laptop 7th Edition and Surface Pro 11th Edition, towards the end of fiscal Q4. But we won’t see the full impact of these sales until next quarter. So, there’s some hope that Surface’s fortunes might turn around.
The company has also revamped its hardware portfolio amid early 2023 layoffs. Yet, the Surface Pro 10 and Surface Laptop 6 didn’t seem to move the needle much. All eyes are now on the next quarter to see if the new Surface launches will recover revenue.
Overall, it’s been a mixed bag for Microsoft’s consumer devices. Surface and Xbox hardware revenues are struggling, but Game Pass is a runaway success. I mean, it is not even weird to see Game Pass. With the price hikes for Game Pass Ultimate and PC Game Pass set for September, we’ll see how this impacts subscriber numbers. Game Pass Ultimate will go up to $19.99 a month, and PC Game Pass to $11.99 a month.
LinkedIn is among the successors too, with a growth of 10%, and Microsoft 365 Consumer subscribers got up to 82.5 million. Dynamics products and cloud services also did well, with a 16% revenue increase, forced by a 19% boost in Dynamics 365 revenue.
Finally, let’s not forget about Windows. Windows revenue saw a 7% uptick, with OEM revenue growth of 4% and commercial products and cloud services up by 11%. Devices revenue might be down, but overall, Microsoft’s got plenty of strong points to lean on.
As per the official info:
The following table reconciles our financial results for the fiscal year ended June 30, 2024, reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.
| Twelve Months Ended June 30, | |||||
|---|---|---|---|---|---|
| ($ in millions, except per share amounts) | Revenue | Operating Income | Net Income | Diluted Earnings per Share | |
| 2023 As Reported (GAAP) | $211,915 | $88,523 | $72,361 | $9.68 | |
| Severance, hardware-related impairment, and lease consolidation costs | – | 1,171 | 946 | 0.13 | |
| 2023 As Adjusted (non-GAAP) | $211,915 | $89,694 | $73,307 | $9.81 | |
| 2024 As Reported (GAAP) | $245,122 | $109,433 | $88,136 | $11.80 | |
| Percentage Change Y/Y (GAAP) | 16% | 24% | 22% | 22% | |
| Percentage Change Y/Y Constant Currency | 15% | 23% | 21% | 21% | |
| Percentage Change Y/Y (non-GAAP) | 16% | 22% | 20% | 20% | |
| Percentage Change Y/Y (non-GAAP) Constant Currency | 15% | 21% | 20% | 20% | |
Financial Performance Constant Currency Reconciliation
| Three Months Ended June 30, | |||||
|---|---|---|---|---|---|
| ($ in millions, except per share amounts) | Revenue | Operating Income | Net Income | Diluted Earnings per Share | |
| 2023 As Reported (GAAP) | $56,189 | $24,254 | $20,081 | $2.69 | |
| 2024 As Reported (GAAP) | $64,727 | $27,925 | $22,036 | $2.95 | |
| Percentage Change Y/Y (GAAP) | 15% | 15% | 10% | 10% | |
| Constant Currency Impact | $(345) | $(218) | $(269) | $(0.04) | |
| Percentage Change Y/Y Constant Currency | 16% | 16% | 11% | 11% | |
| Twelve Months Ended June 30, | |||||
|---|---|---|---|---|---|
| ($ in millions, except per share amounts) | Revenue | Operating Income | Net Income | Diluted Earnings per Share | |
| 2023 As Reported (GAAP) | $211,915 | $88,523 | $72,361 | $9.68 | |
| 2023 As Adjusted (non-GAAP) | $211,915 | $89,694 | $73,307 | $9.81 | |
| 2024 As Reported (GAAP) | $245,122 | $109,433 | $88,136 | $11.80 | |
| Percentage Change Y/Y (GAAP) | 16% | 24% | 22% | 22% | |
| Percentage Change Y/Y (non-GAAP) | 16% | 22% | 20% | 20% | |
| Constant Currency Impact | $900 | $717 | $312 | $0.04 | |
| Percentage Change Y/Y Constant Currency | 15% | 23% | 21% | 21% | |
| Percentage Change Y/Y (non-GAAP) Constant Currency | 15% | 21% | 20% | 20% | |
Segment Revenue Constant Currency Reconciliation
| Three Months Ended June 30, | |||
|---|---|---|---|
| ($ in millions) | Productivity and Business Processes | Intelligent Cloud | More Personal Computing |
| 2023 As Reported (GAAP) | $18,291 | $23,993 | $13,905 |
| 2024 As Reported (GAAP) | $20,317 | $28,515 | $15,895 |
| Percentage Change Y/Y (GAAP) | 11% | 19% | 14% |
| Constant Currency Impact | $(106) | $(174) | $(65) |
| Percentage Change Y/Y Constant Currency | 12% | 20% | 15% |
Selected Product and Service Revenue Constant Currency Reconciliation
| Three Months Ended June 30, 2024 | |||
|---|---|---|---|
| Percentage Change Y/Y (GAAP) | Constant Currency Impact | Percentage Change Y/Y Constant Currency | |
| Microsoft Cloud | 21% | 1% | 22% |
| Office Commercial products and cloud services | 12% | 1% | 13% |
| Office 365 Commercial | 13% | 1% | 14% |
| Office Consumer products and cloud services | 3% | 1% | 4% |
| 10% | (1)% | 9% | |
| Dynamics products and cloud services | 16% | 0% | 16% |
| Dynamics 365 | 19% | 1% | 20% |
| Server products and cloud services | 21% | 1% | 22% |
| Azure and other cloud services | 29% | 1% | 30% |
| Windows | 7% | 1% | 8% |
| Windows OEM | 4% | 0% | 4% |
| Windows Commercial products and cloud services | 11% | 1% | 12% |
| Devices | (11)% | 2% | (9)% |
| Xbox content and services | 61% | 0% | 61% |
| Search and news advertising excluding traffic acquisition costs | 19% | 0% | 19% |
