Microsoft Q4 2024 Earnings
Posted:![Microsoft Q4 2024 Earnings](/media/rvalxcx2/microsoft-q4-2024-earnings.jpg)
Microsoft Stock Slumps 6% Following Underwhelming AI Performance
Microsoft for the fourth quarter of 2024 reported revenue of $64.7 billion increased by 15% year-over-year (YoY).
On a segmental basis, Microsoft's Azure growth, though generally slowing, saw a significant contribution from AI services in the June quarter, accounting for an 8% point increase in revenue, up from 7% in the previous quarter.
Despite not disclosing absolute revenue figures for Azure, which is poised to benefit from the rising interest in AI, CEO Satya Nadella highlighted that Azure AI is now used by over 60,000 customers. This marks a nearly 60% year-on-year increase, with the average spend per customer also on the rise.
The company's leading segment, Intelligent Cloud, generated $28.52 billion in revenue, a 19% increase. This segment includes the Azure public cloud, Windows Server, Nuance, and GitHub. This growth highlights the strong performance of Azure and its associated services despite the overall slowing growth rate.
Revenue from Microsoft's personal computing business, which encompasses Windows and devices like the Xbox and Surface computers, increased by 14%. This growth was supported by stabilizing personal computer sales. According to research firm IDC, the PC market expanded for the second consecutive quarter during the April-June period.
The Productivity and Business Processes unit, which includes Office software and LinkedIn, generated $20.32 billion in revenue, representing an 11% increase YoY.
Net income rose to $22.04 billion, up from $20.08 billion, or $2.69 per share, in the same quarter last year.
The results were bolstered by a strengthening PC market, with Windows license sales to device makers rising by 4%.
In gaming, Microsoft now boasts over 500 million monthly active users across various consoles, PCs, and mobile devices, following the Activision Blizzard acquisition that was finalized in October, according to Satya Nadella.
"Our share gains accelerated this year driven by AI," said CEO Satya Nadella. However, according to Amy Hood, Microsoft’s finance chief, demand for Azure AI services exceeded available capacity. This trend was noted in April. She also mentioned that Azure's growth in June was slightly below expectations in some parts of Europe.
Regarding guidance, Microsoft projected fiscal first-quarter revenue between $63.8 billion and $64.8 billion, implying a 13.8% growth rate at the midpoint of the range. According to Amy Hood, Microsoft anticipates fiscal first-quarter Azure revenue growth between 28% and 29% at constant currency, with faster growth expected in the second half of the fiscal year.
Microsoft shares dropped by as much as 7% in extended trading on Tuesday. Despite reporting better-than-expected earnings and revenue, investors were more concerned with the disappointing cloud results.
Visit Us: https://graniteshares.com/institutional/uk/en-uk/
Capital at Risk | Sophisticated Investors Only
Sources:
Leverage Microsoft ETPs by GraniteShares
Leverage Microsoft ETPs by GraniteShares
Product name | Ticker | ||
---|---|---|---|
USD | EUR | GBX | |
DISCLAIMER
This is a disclaimer stating that all trading and investing comes with risks. Always do your research and do not invest more than you can afford to spend. GraniteShares accepts no responsibility for any loss or damage resulting directly or indirectly from the use of this blog or the contents.
This blog does not constitute an offer to buy or sell or a solicitation of an offer to buy securities in any company. Nothing contained herein constitutes investment, legal, tax or other advice nor is to be relied upon in making an investment or other decision. No recommendation is made positive or otherwise, regarding individual securities or investments mentioned herein. Any summary list of risk factors does not purport to be a complete enumeration or explanation of the risks involved in a particular investment. Prospective clients must consult with their own legal, tax and financial advisers before deciding to invest. This email contains the opinions of the author and such opinions are subject to change without notice. The source of data is GraniteShares unless otherwise stated. No guarantee is made to the accuracy of the information provided which has been obtained from sources believed to be reliable. This email and the information contained herein is intended only for the use of persons (or entities they represent) to whom it has been provided. Past performance is not a reliable indicator of future results. The value of an investment may go down as well as up and can result in losses, up to and including a total loss of the amount initially invested. Investments may involve numerous risks including, among others, company risks, general market risks, credit risks, foreign exchange risks, interest rate risks, geopolitical risks and liquidity risks. Please note that GraniteShares short and leveraged Exchange Traded Products are for sophisticated investors.
GraniteShares Limited is an appointed representative of Messels Limited which is authorised and regulated by the Financial Conduct Authority. GraniteShares Limited is contracted by GraniteShares Jersey Limited to provide operating and marketing services.
![Graniteshares](https://graniteshares.com/media/v54ldbla/gs-square-logo.png)
GraniteShares
GraniteShares