Microsoft's revenue rose 12.3% to $69.63 billion in the quarter to Dec 31, 2024 as gaming revenue fell 7%

Written by Claude Sonnet 5.5, an AI model, from public records. Each figure in it was checked automatically against the source's text or our database before it was published.

Microsoft reported revenue of $69.63 billion for the quarter from Oct 1 to Dec 31, 2024, up 12.3% from $62.02 billion a year earlier. Its 10-Q, the quarterly report US-listed companies file with the Securities and Exchange Commission, called the period the second quarter of fiscal year 2025. Operating income, the profit from running the business before interest and tax, was $31.65 billion, up 17.1% from $27.03 billion. Net income was $24.11 billion, up 10.2% from $21.87 billion, and diluted earnings per share were $3.23 against $2.93.1^,2^,3^,4^,5^,6^,7^,8^,9^,10^,11^,12

Gaming revenue was $6.58 billion against $7.11 billion a year earlier, a decrease of $530 million, or 7%. The company tied the decline to Xbox hardware, whose revenue fell 29% on a lower volume of consoles sold, partly offset by Xbox content and services, whose revenue rose 2% on growth in Xbox Game Pass. Xbox content and services covered first- and third-party content, including games and in-game content, Xbox Game Pass and other subscriptions, Xbox Cloud Gaming, advertising and third-party disc royalties.13^,14^,15^,16

Below operating income, other income and expense was a net expense of $2.288 billion, against $506 million a year earlier. The company's discussion said net recognized losses on investments, $860 million in the quarter, rose primarily on higher impairments and lower gains on equity investments. It said its other, net line, an expense of $1.165 billion against $169 million, primarily reflected net recognized losses on equity method investments, including OpenAI. In an 8-K, the form companies use to report events as they happen, filed on Dec 11, 2024, Microsoft had said it expected to record an impairment charge of approximately $800 million in other income and expense in the quarter on its minority investment in Cruise, an autonomous vehicle company majority-owned by General Motors. In the 10-Q text that we hold, the discussion of other income and expense does not name Cruise, so it does not show which line carries that charge.17^,18^,19^,20^,21^,22^,23^,24^,25

The company said revenue growth came from Intelligent Cloud and Productivity and Business Processes, and that Microsoft Cloud revenue rose 21% to $40.9 billion. Chief executive Satya Nadella said in the earnings release, which Microsoft filed in an 8-K on the same day as the 10-Q, that the company's AI business had passed an annual revenue run rate of $13 billion, up 175% from a year earlier. The release said Microsoft returned $9.7 billion to shareholders through dividends and share repurchases in the quarter.26^,27^,28^,29^,30^,31

Our records hold the text of the report's management discussion and one note to its financial statements, but not its other exhibits, and they cannot tell whether the year-earlier figures were restated.25^,32