Microsoft Corporation reported robust financial results for Q4 2024, with total revenue reaching $64.7 billion, marking a 15% increase year-over-year. The company notably emphasized its growing strength in the cloud segment, which generated $36.8 billion in revenue, a 21% growth from the previous year, underscoring the ongoing migration to cloud-based solutions and AI-driven efficiencies. CEO Satya Nadella highlighted that cloud and AI investments are expected to drive sustained growth, with strategic long-term infrastructure expenditures set to optimize service delivery across global markets. The overall strong demand for product offerings, particularly within Azure and Microsoft 365, reflects Microsoft’s effective alignment with customer needs and technological advancements in AI.
Key Performance Indicators
Revenue
Increasing
64.73B
QoQ: 4.64% | YoY: 15.20%
Gross Profit
Increasing
45.04B
69.59% margin
QoQ: 3.90% | YoY: 14.34%
Operating Income
Increasing
27.93B
QoQ: 1.25% | YoY: 15.14%
Net Income
Increasing
22.04B
QoQ: 0.44% | YoY: 9.74%
EPS
Increasing
2.96
QoQ: 0.34% | YoY: 9.63%
Revenue Trend
Margin Analysis
Financial Highlights
1. Revenue Growth: Total revenue for Q4 2024 was $64.7 billion, up 15% year-over-year and 4.64% quarter-over-quarter. Cloud revenue marked $36.8 billion, showing a growth of 21%.
2. Profitability: Operating income for the quarter was $27.9 billion, equating to an operating margin of 43%, showcasing strong cost management. Net income grew to $22.0 billion, with an EPS of $2.95.
3. Cost Management: Gross profit reached $45.0 billion, resulting in a gross margin of 69.5%, slightly lower due to a shift in sales mix.
4. Cash Flow: Cash flow from operations was $37.2 billion, a notable 29% growth, driving free cash flow up to $23.3 billion, which effectively supports ongoing capital expenditures for infrastructure.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
64.73B
15.20%
4.64%
Gross Profit
45.04B
14.34%
3.90%
Operating Income
27.93B
15.14%
1.25%
Net Income
22.04B
9.74%
0.44%
EPS
2.96
9.63%
0.34%
Key Financial Ratios
Gross Profit Margin
Excellent
69.60%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Excellent
43.10%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Excellent
34.00%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Fair
4.30%
Return on assets is acceptable but below top-tier companies
Return on Equity
Fair
8.21%
Return on equity is acceptable but below top-tier companies
Current Ratio
Adequate
1.28
Current ratio meets minimum requirements but limited cushion
Debt to Equity
Conservative
0.25
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Growth
38.52x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
12.64x
Very high premium suggests asset-light business model or lofty expectations
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