Microsoft Just published the fourth and final quarter of its fiscal 2024 financial results. The software maker earned $64.7 billion in revenue and net profit of $22 billion during the fourth quarter. Revenue increased 15 percent and net profit increased 10 percent.
Microsoft's intelligent cloud revenue, which includes the company's server products and cloud services, totaled $28.5 billion and was up 19 percent year over year. Revenue from this part of Microsoft's business now accounts for nearly 45 percent of all revenue. While cloud revenue is strong once again, momentum from Microsoft's consumer devices continues to decline. Surface revenue has now declined for seven consecutive quarters.
Windows and Surface revenue
Windows OEM revenue, the price manufacturers pay to license Windows for laptops and PCs, rose four percent year over year. Gartner said earlier this month that PC shipments had grown for three consecutive quarters, and that is reflected in the growth of Microsoft's Windows OEM in the same three quarters.
Microsoft also launched its new Copilot Plus PCs toward the end of the fiscal fourth quarter, with a variety of Qualcomm-powered devices available starting June 18. Two new Surface devices, the Surface Laptop 7th Edition and Surface Pro 11th Edition, also launched in June. However, the full impact of sales on device revenue won’t be felt until next quarter.
That means Surface revenue, or what Microsoft now calls device revenue, is down again this quarter by 11 percent. The last time Microsoft’s Surface revenue rose was in the first quarter of fiscal 2023, the quarter that ended on September 30, 2022.
Microsoft has been revamping its hardware portfolio amid layoffs in early 2023, and the Surface Pro 10 and Surface Laptop 6 for Business don't appear to have had much of an impact on revenue. All eyes are on the next quarter to see if the launches of the new Surface Laptop and Surface Pro have helped device revenue recover.
Xbox and games
Xbox content and services revenue, including Xbox Game Pass, increased 61 percent this quarter. Activision Blizzard revenue once again contributed the majority of revenue in this case, with 58 net impact points. Without Activision Blizzard revenue, Xbox content and services revenue would have increased three percent year-over-year.
In February, Microsoft revealed that Xbox Game Pass now has 34 million subscribers, including Xbox Game Pass Core (formerly Xbox Live Gold) members. Microsoft plans to soon launch a new Xbox Game Pass Standard plan, designed to replace the Xbox Game Pass for consoles offering for new subscribers.
Microsoft just launched last year Call of Duty: Modern Warfare III on Xbox Game Pass, and is also planning to do Call of Duty: Black Ops 6the next installment in Activision's popular franchise, available on Xbox Game Pass later this year.
Microsoft’s price increases for Xbox Game Pass Ultimate and PC Game Pass won’t go into effect until September, with Game Pass Ultimate increasing to $19.99 per month, a $3 increase over the current price of $16.99 per month. PC Game Pass will also increase to $11.99 per month in September.
