REDMOND, Wash. — January 30, 2024 — Microsoft Corp. at this time introduced the next outcomes for the quarter ended December 31, 2023, as in comparison with the corresponding interval of final fiscal 12 months:
- Income was $62.0 billion and elevated 18% (up 16% in fixed forex)
- Working earnings was $27.0 billion and elevated 33%, and elevated 25% non-GAAP (up 23% in fixed forex)
- Internet earnings was $21.9 billion and elevated 33%, and elevated 26% non-GAAP (up 23% in fixed forex)
- Diluted earnings per share was $2.93 and elevated 33%, and elevated 26% non-GAAP (up 23% in fixed forex)
Microsoft accomplished the acquisition of Activision Blizzard, Inc. (“Activision”) on October 13, 2023. Monetary outcomes from the acquired enterprise are reported within the Extra Private Computing section.
“We’ve moved from speaking about AI to making use of AI at scale,” stated Satya Nadella, chairman and chief government officer of Microsoft. “By infusing AI throughout each layer of our tech stack, we’re successful new prospects and serving to drive new advantages and productiveness good points throughout each sector.”
“Robust execution by our gross sales groups and companions drove Microsoft Cloud income to $33.7 billion, up 24% (up 22% in fixed forex) year-over-year,” stated Amy Hood, government vp and chief monetary officer of Microsoft.
The next desk reconciles our monetary outcomes reported in accordance with typically accepted accounting ideas (GAAP) to non-GAAP monetary outcomes. Further data relating to our non-GAAP definition is offered beneath. All development comparisons relate to the corresponding interval within the final fiscal 12 months.
| Three Months Ended December 31, | ||||||
| ($ in thousands and thousands, besides per share quantities) | Income | Working Earnings | Internet Earnings | Diluted Earnings per Share | ||
| 2022 As Reported (GAAP) | $52,747 | $20,399 | $16,425 | $2.20 | ||
| Severance, hardware-related impairment, and lease consolidation prices | – | 1,171 | 946 | 0.12 | ||
| 2022 As Adjusted (non-GAAP) | $52,747 | $21,570 | $17,371 | $2.32 | ||
| 2023 As Reported (GAAP) | $62,020 | $27,032 | $21,870 | $2.93 | ||
| Proportion Change Y/Y (GAAP) | 18% | 33% | 33% | 33% | ||
| Proportion Change Y/Y Fixed Foreign money | 16% | 30% | 30% | 30% | ||
| Proportion Change Y/Y (non-GAAP) | 18% | 25% | 26% | 26% | ||
| Proportion Change Y/Y (non-GAAP) Fixed Foreign money | 16% | 23% | 23% | 23% | ||
Enterprise Highlights
Income in Productiveness and Enterprise Processes was $19.2 billion and elevated 13% (up 12% in fixed forex), with the next enterprise highlights:
- Workplace Business merchandise and cloud companies income elevated 15% (up 13% in fixed forex) pushed by Workplace 365 Business income development of 17% (up 16% in fixed forex)
- Workplace Shopper merchandise and cloud companies income elevated 5% (up 4% in fixed forex) and Microsoft 365 Shopper subscribers grew to 78.4 million
- LinkedIn income elevated 9% (up 8% in fixed forex)
- Dynamics merchandise and cloud companies income elevated 21% (up 19% in fixed forex) pushed by Dynamics 365 income development of 27% (up 24% in fixed forex)
Income in Clever Cloud was $25.9 billion and elevated 20% (up 19% in fixed forex), with the next enterprise highlights:
- Server merchandise and cloud companies income elevated 22% (up 20% in fixed forex) pushed by Azure and different cloud companies income development o 30% (up 28% in fixed forex)
Income in Extra Private Computing was $16.9 billion and elevated 19% (up 18% in fixed forex), with the next enterprise highlights:
- Home windows income elevated 9% with Home windows OEM income development of 11% and Home windows Business merchandise and cloud companies income development of 9% (up 7% in fixed forex)
- Units income decreased 9% (down 10% in fixed forex)
- Xbox content material and companies income elevated 61% (up 60% in fixed forex) pushed by 55 factors of internet affect from the Activision acquisition
- Search and information promoting income excluding visitors acquisition prices elevated 8% (up 7% in fixed forex)
Microsoft returned $8.4 billion to shareholders within the type of share repurchases and dividends within the second quarter of fiscal 12 months 2024.
Enterprise Outlook
Microsoft will present forward-looking steerage in reference to this quarterly earnings announcement on its earnings convention name and webcast.
Quarterly Highlights, Product Releases, and Enhancements
Each quarter Microsoft delivers a whole bunch of merchandise, both as new releases, companies, or enhancements to present services and products. These releases are a results of vital analysis and improvement investments, remodeled a number of years, designed to assist prospects be extra productive and safe and to ship differentiated worth throughout the cloud and the sting.
Listed below are the main product releases and different highlights for the quarter, organized by product classes, to assist illustrate how we’re accelerating innovation throughout our companies whereas increasing our market alternatives.
Environmental, Social, and Governance (ESG)
To higher execute on Microsoft’s mission, we focus our Environmental, Social, and Governance (ESG) efforts the place we are able to have essentially the most optimistic affect. To be taught extra about our newest initiatives and priorities, please go to our investor relations ESG web site.
Webcast Particulars
Satya Nadella, chairman and chief government officer, Amy Hood, government vp and chief monetary officer, Alice Jolla, chief accounting officer, Keith Dolliver, company secretary and deputy normal counsel, and Brett Iversen, vp of investor relations, will host a convention name and webcast at 2:30 p.m. Pacific time (5:30 p.m. Japanese time) at this time to debate particulars of the corporate’s efficiency for the quarter and sure forward-looking data. The session could also be accessed at http://www.microsoft.com/en-us/investor. The webcast will probably be obtainable for replay by way of the shut of enterprise on January 30, 2025.
Non-GAAP Definition
Q2 cost. Within the second quarter of fiscal 12 months 2023, Microsoft recorded prices associated to choices introduced on January 18th, 2023, together with worker severance bills, impairment costs ensuing from adjustments to our {hardware} portfolio, and prices associated to lease consolidation actions.
Microsoft has offered non-GAAP monetary measures associated to the Q2 cost to assist traders in higher understanding our efficiency. Microsoft believes these non-GAAP measures help traders by offering further perception into its operational efficiency and assist make clear developments affecting its enterprise. For comparability of reporting, administration considers non-GAAP measures at the side of GAAP monetary leads to evaluating enterprise efficiency. The non-GAAP monetary measures introduced on this launch shouldn’t be thought of as an alternative to, or superior to, the measures of monetary efficiency ready in accordance with GAAP.
Fixed Foreign money
Microsoft presents fixed forex data to supply a framework for assessing how our underlying companies carried out excluding the impact of international forex charge fluctuations. To current this data, present and comparative prior interval outcomes for entities reporting in currencies aside from United States {dollars} are transformed into United States {dollars} utilizing the common change charges from the comparative interval reasonably than the precise change charges in impact throughout the respective durations. All development comparisons relate to the corresponding interval within the final fiscal 12 months. Microsoft has offered this non-GAAP monetary data to assist traders in higher understanding our efficiency. The non-GAAP monetary measures introduced on this launch shouldn’t be thought of as an alternative to, or superior to, the measures of monetary efficiency ready in accordance with GAAP.
Monetary Efficiency Fixed Foreign money Reconciliation
| Three Months Ended December 31, | ||||
| ($ in thousands and thousands, besides per share quantities) | Income | Working Earnings | Internet Earnings | Diluted Earnings per Share |
| 2022 As Reported (GAAP) | $52,747 | $20,399 | $16,425 | $2.20 |
| 2022 As Adjusted (non-GAAP) | $52,747 | $21,570 | $17,371 | $2.32 |
| 2023 As Reported (GAAP) | $62,020 | $27,032 | $21,870 | $2.93 |
| Proportion Change Y/Y (GAAP) | 18% | 33% | 33% | 33% |
| Proportion Change Y/Y (non-GAAP) | 18% | 25% | 26% | 26% |
| Fixed Foreign money Impression | $756 | $565 | $510 | $0.07 |
| Proportion Change Y/Y Fixed Foreign money | 16% | 30% | 30% | 30% |
| Proportion Change Y/Y (non-GAAP) Fixed Foreign money | 16% | 23% | 23% | 23% |
Section Income Fixed Foreign money Reconciliation
| Three Months Ended December 31, | |||
| ($ in thousands and thousands) | Productiveness and Enterprise Processes | Clever Cloud | Extra Private Computing |
| 2022 As Reported (GAAP) | $17,002 | $21,508 | $14,237 |
| 2023 As Reported (GAAP) | $19,249 | $25,880 | $16,891 |
| Proportion Change Y/Y (GAAP) | 13% | 20% | 19% |
| Fixed Foreign money Impression | $230 | $367 | $159 |
| Proportion Change Y/Y Fixed Foreign money | 12% | 19% | 18% |
Chosen Product and Service Income Fixed Foreign money Reconciliation
| Three Months Ended December 31, 2023 | |||
| Proportion Change Y/Y (GAAP) | Fixed Foreign money Impression | Proportion Change Y/Y Fixed Foreign money | |
| Microsoft Cloud | 24% | (2)% | 22% |
| Workplace Business merchandise and cloud companies | 15% | (2)% | 13% |
| Workplace 365 Business | 17% | (1)% | 16% |
| Workplace Shopper merchandise and cloud companies | 5% | (1)% | 4% |
| 9% | (1)% | 8% | |
| Dynamics merchandise and cloud companies | 21% | (2)% | 19% |
| Dynamics 365 | 27% | (3)% | 24% |
| Server merchandise and cloud companies | 22% | (2)% | 20% |
| Azure and different cloud companies | 30% | (2)% | 28% |
| Home windows | 9% | 0% | 9% |
| Home windows OEM | 11% | 0% | 11% |
| Home windows Business merchandise and cloud companies | 9% | (2)% | 7% |
| Units | (9)% | (1)% | (10)% |
| Xbox content material and companies | 61% | (1)% | 60% |
| Search and information promoting excluding visitors acquisition prices | 8% | (1)% | 7% |
About Microsoft
Microsoft (Nasdaq “MSFT” @microsoft) allows digital transformation for the period of an clever cloud and an clever edge. Its mission is to empower each particular person and each group on the planet to realize extra.
Ahead-Wanting Statements
Statements on this launch which are “forward-looking statements” are based mostly on present expectations and assumptions which are topic to dangers and uncertainties. Precise outcomes might differ materially due to elements akin to:
- intense competitors in all of our markets that will result in decrease income or working margins;
- deal with cloud-based companies presenting execution and aggressive dangers;
- vital investments in services and products that will not obtain anticipated returns;
- acquisitions, joint ventures, and strategic alliances that will have an opposed impact on our enterprise;
- impairment of goodwill or amortizable intangible property inflicting a major cost to earnings;
- cyberattacks and safety vulnerabilities that might result in lowered income, elevated prices, legal responsibility claims, or hurt to our repute or aggressive place;
- disclosure and misuse of non-public information that might trigger legal responsibility and hurt to our repute;
- the likelihood that we might not be capable of defend data saved in our services and products from use by others;
- abuse of our promoting, skilled, market, or gaming platforms that will hurt our repute or consumer engagement;
- the event of the web of issues presenting safety, privateness, and execution dangers;
- points about the usage of synthetic intelligence in our choices that will end in reputational or aggressive hurt, or authorized legal responsibility;
- extreme outages, information losses, and disruptions of our on-line companies if we fail to keep up an enough operations infrastructure;
- high quality or provide issues;
- authorities enforcement beneath competitors legal guidelines and new market regulation might restrict how we design and market our merchandise;
- potential penalties of commerce and anti-corruption legal guidelines;
- potential penalties of current and growing authorized and regulatory necessities;
- legal guidelines and laws regarding the dealing with of non-public information that will impede the adoption of our companies or end in elevated prices, authorized claims, fines, or reputational harm;
- claims towards us that will end in opposed outcomes in authorized disputes;
- uncertainties regarding our enterprise with authorities prospects;
- further tax liabilities;
- an incapacity to guard and make the most of our mental property might hurt our enterprise and working outcomes;
- claims that Microsoft has infringed the mental property rights of others;
- harm to our repute or our manufacturers that will hurt our enterprise and working outcomes;
- opposed financial or market circumstances that will hurt our enterprise;
- catastrophic occasions or geo-political circumstances, such because the COVID-19 pandemic, that will disrupt our enterprise;
- publicity to elevated financial and operational uncertainties from working a world enterprise, together with the consequences of international forex change and
- the dependence of our enterprise on our potential to draw and retain gifted staff.
For extra details about dangers and uncertainties related to Microsoft’s enterprise, please discuss with the “Administration’s Dialogue and Evaluation of Monetary Situation and Outcomes of Operations” and “Threat Elements” sections of Microsoft’s SEC filings, together with, however not restricted to, its annual report on Type 10-Okay and quarterly reviews on Type 10-Q, copies of which can be obtained by contacting Microsoft’s Investor Relations division at (800) 285-7772 or at Microsoft’s Investor Relations web site at http://www.microsoft.com/en-us/investor.
All data on this launch is as of December 31, 2023. The corporate undertakes no responsibility to replace any forward-looking assertion to evolve the assertion to precise outcomes or adjustments within the firm’s expectations.
For extra data, press solely:
Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777, rrt@we-worldwide.com
For extra data, monetary analysts and traders solely:
Brett Iversen, Vice President, Investor Relations, (425) 706-4400
Observe to editors: For extra data, information and views from Microsoft, please go to the Microsoft Information Heart at http://www.microsoft.com/information. Internet hyperlinks, phone numbers, and titles have been appropriate at time of publication, however might since have modified. Shareholder and monetary data, in addition to at this time’s 2:30 p.m. Pacific time convention name with traders and analysts, is on the market at http://www.microsoft.com/en-us/investor.
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