What you need to know
- Microsoft just released its earnings report for FY24 Q3.
- The tech giant saw increases in revenue, operating income, net income, and diluted earnings per share.
- AI played a major factor in Microsoft’s success, according to company CEO Satya Nadella.
Microsoft just reported its earnings for FY24 Q3, which ended March 31, 2024. The quarter saw large increases in revenue (up 17%), operating income (up 23%), net income (up 20%), and diluted earnings per share (up 20%). The tech giant beat industry expectations in several key areas, including operating income and earnings per share.
Microsoft saw strong numbers across the board, thanks in large part to the growing demand for AI. “Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry,” said Microsoft CEO Satya Nadella.
AI everywhere
AI is one of the hottest topics in tech, so it’s not surprising that a company with billions of dollars invested in AI would see strong results. Microsoft integrates AI into several of its services, but Microsoft earns a large portion of its revenue from cloud computing and powering services. As AI demand increases, so will Microsoft revenue. There are also knock-on effects from interest in AI rising, such as people looking to purchase new computers to be able to use the latest AI features.
This is a developing story and will be updated as more information arrives, including quotes from Microsoft’s upcoming webcast.
Microsoft FY24 Q3: Business Highlights
Revenue in Productivity and Business Processes was $19.6 billion and increased 12% (up 11% in constant currency), with the following business highlights:
- Office Commercial products and cloud services revenue increased 13% (up 12% in constant currency) driven by Office 365 Commercial revenue growth of 15%
- Office Consumer products and cloud services revenue increased 4% and Microsoft 365 Consumer subscribers grew to 80.8 million
- LinkedIn revenue increased 10% (up 9% in constant currency)
- Dynamics products and cloud services revenue increased 19% (up 17% in constant currency) driven by Dynamics 365 revenue growth of 23% (up 22% in constant currency)
Revenue in Intelligent Cloud was $26.7 billion and increased 21%, with the following business highlights:
- Server products and cloud services revenue increased 24% driven by Azure and other cloud services revenue growth of 31%
Revenue in More Personal Computing was $15.6 billion and increased 17%, with the following business highlights:
- Windows revenue increased 11% with Windows OEM revenue growth of 11% and Windows Commercial products and cloud services revenue growth of 13% (up 12% in constant currency)
- Devices revenue decreased 17% (down 16% in constant currency)
- Xbox content and services revenue increased 62% (up 61% in constant currency) driven by 61 points of net impact from the Activision acquisition
- Search and news advertising revenue excluding traffic acquisition costs increased 12%
