Microsoft reports $64.7 billion FY24 Q4 revenue, the seventh consecutive Surface decline, and big jumps for Xbox and cloud

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Microsoft's growth continues, with the company reporting a 15% year-over-year revenue increase.

Microsoft Surface Pro 11 with Qualcomm Snapdragon X Elite
Microsoft's Surface revenue has declined for the seventh quarter in a row, even as other aspects of the business soar. (Image credit: Daniel Rubino)
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What you need to know

  • Following the conclusion of Microsoft's fiscal year 2024, the company has published its FY24 Q4 results in a new earnings report.
  • Microsoft reports $64.7 billion in revenue for the quarter (a 15% increase) and $245.1 billion full the full year (up 16%), with positive growth across all of its divisions.
  • Notably, Xbox and gaming saw a huge 61% revenue jump, with most of that increase coming from Microsoft's acquisition of Activision Blizzard King late last year. Server products, cloud services, and search and news advertising revenue rose substantially as well.
  • Xbox hardware is down 42%, which indicates that Xbox Series X|S sales have slowed. Surface revenue has also fallen 11%; this is the seventh consecutive decline for Microsoft's devices division.

Following the end of the fourth and final quarter of Microsoft's fiscal year 2024 on July 30, the firm has released its FY24 Q4 earnings report. This report gives consumers and investors a thorough overview of the health of the company's various different divisions and business ventures.

Compared to the the same period of the previous fiscal year, total revenue has risen by 15%, with Microsoft reporting $64.7 billion for the quarter and $245.1 billion for the whole year (a 16% jump). Some other major numbers from this quarter's results — including operating income, net income, and diluted earnings per share — follow below:

  • Operating income was $27.9 billion, and is up 15% (up 16% in constant currency)
  • Net income was $22 billion, and is up 10% (up 11% in constant currency)
  • Diluted earnings per share was $2.95, and is up 10% (up 11% in constant currency)

Microsoft's Xbox and gaming services revenue has skyrocketed thanks to its acquisition of Activision Blizzard King. (Image credit: Activision Publishing)

Microsoft's continued growth can largely be attributed to the strength of the firm's cloud servers and services, Office and productivity products, and Xbox content and services. Revenue in Productivity and Business Processes was $20.3 billion and rose by 11%, revenue in Intelligent Cloud jumped 19% to $28.5 billion, and revenue in More Personal Computing was $15.9 billion and improved 14%.

Xbox content and services saw the largest upwards spike with a whopping 61% revenue increase year-over-year, with 58 points of net impact coming from Microsoft's acquisition of Activision Blizzard King near the start of the fiscal year. Server products and cloud services also jumped up by an impressive 21%, with search and news advertising revenue (excluding traffic acquisition costs) rising 19%.

Though most of the report is positive, it does show a sizable 42% reduction in Xbox hardware revenue, indicating that Microsoft's Xbox Series X|S console sales have slowed. There's also an 11% decline for devices revenue, which encompasses Microsoft's Surface products. Notably, this is the seventh consecutive quarter in which devices revenue has fallen, signaling that the company is struggling to grow its Surface userbase.

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Analysis: Servers and the cloud are at Microsoft's core

Server products and cloud services are at the heart of Microsoft's business strategy. (Image credit: Microsoft)

If there's one thing this earnings report makes clear about Microsoft, it's that the firm's success in the server products and cloud services business is at the heart of its continued growth. Huge portions of the company's revenue come from things like Microsoft Azure, and offset sizable declines in other areas like the Surface division and Xbox hardware. Microsoft Office continues to be a strong performer as well, with its various applications continuing to stand tall as some of the most popular and widely used productivity tools in computing.

The impact of Microsoft's merger with Activision Blizzard shouldn't be understated, either, with the acquisition bolstering Xbox and gaming revenue by nearly 60% single-handedly. In the months since its completion last year, we've seen big-name Activision Blizzard titles like Diablo 4 and Call of Duty: Modern Warfare 3 come to the Xbox Game Pass catalog, and Call of Duty: Black Ops 6 is headed to the service as well.

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Brendan Lowry
Brendan Lowry

Brendan Lowry is a Windows Central writer and Oakland University graduate with a burning passion for video games, of which he's been an avid fan since childhood. He's been writing for Team WC since the summer of 2017, and you'll find him doing news, editorials, reviews, and general coverage on everything gaming, Xbox, and Windows PC. His favorite game of all time is probably NieR: Automata, though Elden Ring, Fallout: New Vegas, and Team Fortress 2 are in the running, too. When he's not writing or gaming, there's a good chance he's either watching an interesting new movie or TV show or actually going outside for once. Follow him on X (Twitter).