- Microsoft (NDAQ:MSFT) released its financial results for the first quarter of fiscal year 2025, ending Sept. 30, 2024
- The company reported US$65.6 billion in revenue, a 16 per cent increase year-over-year
- Microsoft cloud revenue was US$38.9 billion, a 22 per cent year-over-year increase
- Microsoft stock last traded at US$432.53
Microsoft (NDAQ:MSFT) released its financial results for the first quarter of fiscal year 2025, ending Sept. 30, 2024. The company reported robust growth, largely driven by its cloud services and AI-driven transformation initiatives.
Financial highlights
For Q1 FY2025, Microsoft reported:
- Revenue: US$65.6 billion, a 16 per cent increase year-over-year.
- Operating income: US$30.6 billion, up 14 per cent.
- Net income: US$24.7 billion, an 11 per cent rise.
- Diluted earnings per share (EPS): US$3.30, a 10 per cent increase.
Business and operational highlights
Microsoft’s cloud segment continues to be a major growth driver:
- Microsoft cloud revenue: US$38.9 billion, a 22 per cent year-over-year increase.
- Productivity and business processes: Revenue rose by 12 per cent to US$28.3 billion, driven by strong performance in Microsoft 365 Commercial and Dynamics 365.
- Intelligent cloud: Revenue increased by 20 per cent to US$24.1 billion, with Azure and other cloud services growing by 33 per cent.
- More personal computing: Revenue grew by 17 per cent to US$13.2 billion, bolstered by a 61 per cent rise in Xbox content and services revenue.
Initiatives and corporate developments
During the quarter, Microsoft returned US$9.0 billion to shareholders through dividends and share repurchases. The acquisition of Activision significantly boosted Xbox content and services revenue, which saw a 61 per cent year-over-year increase. However, Xbox hardware revenue declined by 29 per cent.
In a news release, Amy Hood, Microsoft’s executive vice president and CFO, noted that the gaming segment’s performance exceeded expectations because of strong results in first- and third-party content as well as consoles. CEO Satya Nadella highlighted that Game Pass set a new Q1 record for total revenue and average revenue per subscriber.
Management’s perspective
Satya Nadella emphasized the transformative impact of AI on business processes and workflows, noting that Microsoft’s AI platforms and tools are driving new growth and operating leverage for customers. Hood attributed the strong start to the fiscal year to effective execution by sales teams and partners.
Future outlook
Microsoft provided forward-looking guidance during its earnings conference call and webcast Wednesday afternoon. The company remains focused on expanding its market opportunities and driving innovation across its product portfolio.
Microsoft Corp. develops and supports software, services, devices and solutions. The company’s segments include productivity and business processes, intelligent cloud and more personal computing.
Microsoft stock (NDAQ:MSFT) last traded at US$432.53 per share and has risen 15.02 per cent since the year began.
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