Bill Gates' Microsoft Reports Revenue At $56.2 Billion In Q4; FY24 Guidance Fell Short Of Estimates

Bill Gates-founded Microsoft announced its quarterly results for FY23, where its guidance came in below market expectations. In the June 2023 quarter, the software maker's revenue rose by 8% YoY to $56.2 billion. Further, the bottom line picked up by 20% YoY to $20.1 billion.

In constant currency, revenue and net income were up by 10% and 23% YoY.

"Organizations are asking not only how - but how fast - they can apply this next generation of AI to address the biggest opportunities and challenges they face - safely and responsibly," said Satya Nadella, chairman and chief executive officer of Microsoft. "We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend, and driving operating leverage."

Further, Amy Hood, executive vice president and chief financial officer of Microsoft said, "We delivered a solid close to the fiscal year driven by Microsoft Cloud quarterly revenue of $30.3 billion, up 21% (up 23% in constant currency) year-over-year."

Here are the key highlights of revenue in Productivity and Business Processes which came in at $18.3 billion, rising by 10% YoY and 12% in constant current. These key factors are:

Office Commercial products and cloud services: Revenue increased 12% (up 14% in constant currency) driven by Office 365 Commercial revenue growth of 15% (up 17% in constant currency).

Office Consumer products and cloud services: Revenue jumped 3% (up 6% in constant currency) and Microsoft 365 Consumer subscribers grew to 67.0 million.

LinkedIn: Revenue rose 5% (up 7% in constant currency).

Dynamics products and cloud services: Here, revenue increased 19% (up 21% in constant currency) driven by Dynamics 365 revenue growth of 26% (up 28% in constant currency).

Meanwhile, revenue in Intelligent Cloud was $24.0 billion and increased 15% (up 17% in constant currency). However, revenue of More Personal Computing came in at $13.9 billion and decreased by 4% (down 3% in constant currency).

Under the More Personal Computing revenue, Windows OEM revenue dipped 12%, and devices revenue plunged 20%. On the other hand, other indicators posted single-digit growth with Windows Commercial products and cloud services revenue up 2%, Xbox content and services revenue up 5%, and Search and news advertising revenue excluding traffic acquisition costs higher by 8%.

In the fourth fiscal year of FY23, the company returned $9.7 billion to shareholders in the form of share repurchases and dividends.

For Q1 of FY24, Microsoft expects revenue in productivity and business process in the range of $18 to $18.3 billion, while intelligent cloud revenue is seen between $23.3 to $23.6 billion, more personal computing between $12.5 to $12.9 billion, and cost of revenue in the range of $16.6 to $16.8 billion.

In terms of foreign currency impact, Microsoft expects an increase to total revenue growth of approximately, with 1 point in Intelligent Cloud, and no impact to productivity and business processes and more personal computing in Q1 of FY24.

For the full year FY24, the company expects an increase to total revenue growth of approximately 1 point, while no impact is seen in the cost of revenue and OPEX growth.

On Nasdaq, Microsoft shares dipped by more than 4% to $336.05 apiece in the pre-market of Wednesday. While the shares closed nearly 2% up in the previous session.