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AI and cloud growth powers Microsoft Q1 2025 financial results

Consumer, Market News, Technology
NDAQ:MSFT
31 October 2024 09:20 (EDT)
Microsoft headquarters in Redmond, Washington

(Source: Adobe Stock)

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:

Business and operational highlights

Microsoft’s cloud segment continues to be a major growth driver:

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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(Top photo: Adobe stock)


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