Microsoft has released its financial results for the fourth and final quarter of its fiscal year 2024, reporting a total revenue of $64.7 billion and a net income of $22 billion. These figures represent a 15% increase in revenue and a 10% increase in net income compared to the previous year.
The cloud continues to drive Microsoft.
The Intelligent Cloud segment of Microsoft’s business, which includes server products and cloud services, has been the main driver of this growth, with revenue of $28.5 billion, up 19% year-over-year. This segment accounts for nearly 45% of the company’s total revenue.
Challenges for Surface and Xbox
Despite its success in cloud services, Microsoft faces challenges with its consumer devices. Surface sales have declined for the seventh consecutive quarter, down 11% this quarter. New Surface devices launched in June have yet to make a significant impact on sales.
In the gaming segment, Xbox hardware revenue has dropped by 42%. However, the revenue of Xbox content and services, driven by Xbox Game Pass, has increased by 61%. The acquisition of Activision Blizzard has been a critical factor in this growth.
Future perspectives
Looking ahead, Microsoft anticipates continued growth in cloud and Office services revenues. The company is also banking on AI to boost Azure growth in the second half of fiscal 2025. However, device revenue is expected to keep declining in the coming quarters.
In summary, while Microsoft is strengthening its position in the cloud and services space, it faces significant challenges in its consumer hardware lines. It will be interesting to see how the company tackles these challenges in the upcoming quarters.
