Microsoft Revenues Up 18 Percent in Quarter to $62 Billion

Microsoft announced Tuesday that it earned a net income of $21.9 billion on revenues of $62 billion in the quarter ending December 31, 2023. Those figures are up 33 percent and 18 percent, respectively, year-over-year (YOY).

“We’ve moved from talking about AI to applying AI at scale,” Microsoft CEO Satya Nadella said in a prepared statement. “By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”

Microsoft’s Intelligent Cloud business unit was again its biggest, with $25.9 billion in revenue, up 20 percent YOY and driven primarily by its Azure cloud platform. Azure revenues were up 30 percent in the quarter, 6 points of which Microsoft attributed to “AI services.” And Server and cloud services revenue jumped 22 percent. The software giant also reported that its Enterprise Mobility installed base grew 11 percent to over 268 million seats.

Productivity and Business Process delivered $19.2 billion in revenues, with growth of 13 percent YOY. Office Commercial revenues were up 15 percent, and Office 365 seats grew 12 percent. Office Consumer grew 5 percent, with the Microsoft 365 consumer offerings growing 16 percent to 78.4 million subscribers.

More Personal Computing brought up the rear yet again, with revenues of $16.9 billion, up 19 percent YOY. But the gap has shrunk, thanks mostly to a 49 percent jump in Gaming revenue, 44 points of which came from Activision Blizzard. Xbox content and services revenues were up 61 percent (55 points from Activision Blizzard), while Xbox hardware revenues inched up by 3 percent.

Windows revenues from PC makers grew 11 percent in the quarter, with Microsoft citing “market volumes stabilizing to pre-pandemic levels.” But that growth didn’t bleed into the Surface business, as Microsoft reported a 9 percent decline in revenues from Devices.

I’ll have a more detailed rundown of the quarter tomorrow.