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Microsoft

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Microsoft continues
to report strong Revenue
Increases in Q1 2024 - and Growth
(and Innovation) in almost all Areas Despite Global Uncertainty

Despite difficult market conditions, Microsoft reported continued growth and profits for the fourth quarter of fiscal year 2024 (starting July 01, 2023) If you are currently working with a vendor other than Microsoft, you should ask yourself the following questions: how is your current vendor dealing with the economic situation? And what does this development mean for the medium to long-term continuity of both your current solution (or version of the solution) and your vendor itself?

Global Uncertainty and Rapid Development of AI: Global IT Vendors under Pressure

The economic crisis and the ongoing global uncertainty are affecting the revenues of global software vendors. Another factor is that the stunning development of artificial intelligence as part of modern IT solutions requires enormous additional investment in research and development in order not to miss the boat. This is putting many vendors of ERP solutions under pressure.

Microsoft’s FY24 Q1 Results beat Analysts’ Estimates

Microsoft recently announced its Q1 results for the fiscal year 2023/2024. The company reported another strong quarter of growth and innovation with revenue of $56.5 billion, an increase of 8% compared to the first quarter of the previous year. The group also generated a net income of $22.3 billion, an increase of 27% compared to the previous year. The results exceeded analysts’ estimates.

“Consistent execution by our sales teams and partners drove a strong start to the fiscal year with Microsoft Cloud revenue of $31.8 billion, up 24% (up 23% in constant currency) year-over-year,” said Amy Hood, CFO of Microsoft.

Higher Revenue Growth for Dynamics Products and Cloud Services

Dynamics products and cloud services revenue increased by 22 percent and revenue of Dynamics 365 by 28 percent. This is three times the average market growth. In the previous quarter, Dynamics revenue increased by 19 percent, and the already impressive growth rates are increasing even further.

Impressive Growth in Cloud and AI

“We are rapidly infusing AI across every layer of our tech stack and delivering copilots for every role and business process to drive productivity gains for our customers,” said CEO Satya Nadella.

Currently, customers are rushing to new generative AI tools in the cloud, which are being enhanced with software from the start-up OpenAI, which is supported by Microsoft. The Azure OpenAI service currently has 18,000 customers, up from 11,000 in July 2023, representing an impressive growth of 63 percent.

Currently 320 Million Monthly Active Users - steady Growth also for Teams

Microsoft Teams is also growing steadily. The communication app now has more than 320 million monthly active users worldwide - six months ago it was 300 million.

Microsoft Share Price up

Microsoft’s share price rose by 6 percent in after-hours trading following the publication of the results. It has risen by 38 percent since the beginning of 2023, while the S&P 500 has risen by 11 percent over the same period. The S&P 500 is a stock index that lists the shares of 500 of the largest listed US companies.

Continuous Growth and a Stream of Innovation that never dries up

Conclusion: by choosing Microsoft as your software vendor, you can count on continuous growth and a never-ending stream of innovation.

Comparison to FY23 Q1: the Figures at a Glance

Revenue (total) Operating Income Net Income Microsoft Cloud Revenue Earnings per Share
FY24 Q1 $56.5 billion $26.9 billion $22.3 billion $31.8 billion $2.99
FY23 Q1 $50.1 billion $21.5 billion $17.6 billion $25.7 billion $2.35
Compared to FY23 Q1 + 13% + 25% + 27% + 24% + 27%
Increased Revenues at Microsoft
Microsoft achieves revenue increases and growth even under difficult market conditions.