Microsoft: June 2024 Q4 and FY24 Results

ITAM News & Analysis

Microsoft: June 2024 Q4 and FY24 Results

Microsoft Corp recently announced its June 2024 Q4 and FY24 end-of-year results.  

Looking at the overall results across all sectors, the total revenue for Microsoft increased by 16% to a total of $245.1 billion with a net income of $88.1 billion.  

Microsoft attributes this success to both its innovation and its customers ongoing trust. According to Amy Hood, executive vice president and CFO, they had a “solid quarter, highlighted by record bookings and Microsoft quarterly cloud revenue of $36.8 billion, up 21% year-over-year”.  

This statement reinforces Microsoft’s ongoing success in the cloud space, and we see this reflected in its server products and cloud services revenue results. As we already saw trending in Q3, Microsoft’s commercial end-of-year bookings are up 17% – driven by the growth of large, long-term Azure contracts.  

Market Confidence

Despite the positive results, some analysts have expressed these numbers are lower than predicted. We can confirm there was a stock dip on the 31st July when results were announced. The high expectations may be a result of the competitiveness of the cloud space. Analysts and investors keep a watchful eye on the year-over-year increases in this space.  

Productivity and Business Processes

This segment, which includes Office commercial and Office consumer revenue as well as LinkedIn and Dynamics Business Solutions revenue, saw a number of increases. Commercial products and cloud revenue increased by 12% driven by Office 365 commercial revenue growth of 13%. Microsoft also saw its M365 consumer base grow to 82.5 million. Lastly, Dynamics products and cloud services revenue increased by 16%. This is a result of a 19% increase in Dynamics 365.  

Intelligent Cloud

The Intelligent Cloud segment (Microsoft’s top segment), which includes revenue from server products and cloud services, saw an increase of 19% in constant currency. However, Azure and Cloud services revenue saw growth of 30% in constant currency.  

Earnings Call

In Microsoft’s earnings call, Satya Nadella wanted to offer a broader perspective on the AI platform shift and explained that “similar to the cloud, this transition involves both knowledge and intensive investments”. Later in the session, Microsoft’s EVP and CFO Amy Hood reinforced this statement. She confirmed that, “Cloud and AI related spend represents nearly all of total capital expenditures. Within that, roughly half is for infrastructure needs where we continue to build and lease datacenters that will support monetization over the next 15 years and beyond.”  

It’s apparent that huge investment is being undertaken by Microsoft to satisfy demand for Cloud and AI. Overall, it appears Microsoft has had significant success in this space with Copilot contributing heavily towards cloud spend. One example highlighted was Github Copilot, which is by far the most widely adopted AI-powered developer tool with 77,000+ customer. It is now bigger than GitHub when they bought it.  

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