Microsoft Cloud strength drives Q2 results

REDMOND, Wash. — January 30, 2024 — Microsoft Corp. today announced the following results for the quarter ended December 31, 2023, as compared to the corresponding period of last fiscal year:

• Revenue was $62.0 billion and increased 18% (up 16% in constant currency)
• Operating income was $27.0 billion and increased 33%, and increased 25% non-GAAP (up 23% in constant currency)
• Net income was $21.9 billion and increased 33%, and increased 26% non-GAAP (up 23% in constant currency)
• Diluted earnings per share was $2.93 and increased 33%, and increased 26% non-GAAP (up 23% in constant currency)

Microsoft completed the acquisition of Activision Blizzard, Inc. (“Activision”) on October 13, 2023. Financial results from the acquired business are reported in the More Personal Computing segment.

“We’ve moved from talking about AI to applying AI at scale,” said Satya Nadella, chairman and chief executive officer of Microsoft. “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.”

“Strong execution by our sales teams and partners drove Microsoft Cloud revenue to $33.7 billion, up 24% (up 22% in constant currency) year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

** **Business Highlights

Revenue in Productivity and Business Processes was $19.2 billion and increased 13% (up 12% in constant currency), with the following business highlights:

• Office Commercial products and cloud services revenue increased 15% (up 13% in constant currency) driven by Office 365 Commercial revenue growth of 17% (up 16% in constant currency)
• Office Consumer products and cloud services revenue increased 5% (up 4% in constant currency) and Microsoft 365 Consumer subscribers grew to 78.4 million
• LinkedIn revenue increased 9% (up 8% in constant currency)
• Dynamics products and cloud services revenue increased 21% (up 19% in constant currency) driven by Dynamics 365 revenue growth of 27% (up 24% in constant currency)

Revenue in Intelligent Cloud was $25.9 billion and increased 20% (up 19% in constant currency), with the following business highlights:

• Server products and cloud services revenue increased 22% (up 20% in constant currency) driven by Azure and other cloud services revenue growth o 30% (up 28% in constant currency)

Revenue in More Personal Computing was $16.9 billion and increased 19% (up 18% in constant currency), with the following business highlights:

• Windows revenue increased 9% with Windows OEM revenue growth of 11% and Windows Commercial products and cloud services revenue growth of 9% (up 7% in constant currency)
• Devices revenue decreased 9% (down 10% in constant currency)
• Xbox content and services revenue increased 61% (up 60% in constant currency) driven by 55 points of net impact from the Activision acquisition
• Search and news advertising revenue excluding traffic acquisition costs increased 8% (up 7% in constant currency)

Microsoft returned $8.4 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2024.

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Quarterly Highlights, Product Releases, and Enhancements

Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.

Here are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.

Environmental, Social, and Governance (ESG)

To better execute on Microsoft’s mission, we focus our Environmental, Social, and Governance (ESG) efforts where we can have the most positive impact. To learn more about our latest initiatives and priorities, please visit our investor relations ESG website.