Microsoft generated $69.6 billion in revenue in the fourth quarter of 2024, reflecting a 12% increase year-on-year.
This growth was primarily attributed to the rising adoption of Azure, the company’s cloud computing platform, and significant advancements in its artificial intelligence (AI) sector.
Amy Hood, Microsoft’s Executive Vice President and Chief Financial Officer, highlighted that Azure contributed $40.9 billion during this quarter, accounting for 58.1% of the total revenue. She emphasized the company’s dedication to maintaining operational efficiency while continuing to invest in cloud and AI infrastructure.
The quarter also saw a 17% rise in operating income, reaching $31.7 billion, and a 10% increase in net income, totaling $24.1 billion. Additionally, diluted earnings per share went up by 10%, reaching $3.23 compared to the same period in 2023.
CEO Satya Nadella discussed the company’s progress in AI, noting that Microsoft’s AI business has exceeded an annual revenue run rate of $13 billion, reflecting a 175% year-over-year growth. He emphasized the company’s focus on innovation across its technology stack to help customers realize the full return on investment from AI.
In a subsequent web conference with investors, Hood projected that Azure’s growth would be between 31% and 32%, slightly below the 33% anticipated by Wall Street. This forecast led to a 4.5% decline in Microsoft’s shares during after-hours trading.
According to Reuters, investors have expressed concerns regarding the company’s substantial expenditures, the uncertain returns from AI investments, and competition from more cost-effective AI models emerging from China.
On a positive note, LinkedIn Premium subscriptions reached unprecedented levels by the end of 2024, increasing by 9% to $2 billion. This achievement underscores Microsoft’s efforts to enhance its paid tiers with additional features to attract and convert users.
TechCrunch reports that the total number of paid subscribers has grown by approximately 50% over the past two years. Acquired by Microsoft in 2016, LinkedIn expanded its user base to over one billion by November 2023.
Read Also: Ad spend on African shopping apps soars by 80%
In 2024, Microsoft, in collaboration with other technology firms, played a pivotal role in supporting the growth of African startups by providing technology and platforms to facilitate capital raising.
Despite these achievements, Microsoft’s cloud computing platform, Azure, experienced a 31% growth, which was below analyst expectations and a decrease from the 33% growth observed in the previous quarter.
This shortfall contributed to a 4.5% decline in the company’s stock during after-hours trading, as investors expressed concerns over decelerating cloud growth and increasing competition in the AI sector.
In response to the competitive landscape, Microsoft plans to invest $80 billion in AI development in the current fiscal year.
CEO Satya Nadella views the advancements by competitors like China’s DeepSeek positively, anticipating increased demand for AI models. He stressed the importance of making AI models affordable and scalable to maintain a competitive edge.
Overall, Microsoft’s financial performance in the fourth quarter of 2024 reflects its strategic focus on cloud services and AI, while also highlighting the challenges posed by competition and the need for continued investment in these rapidly evolving sectors.
Leave a comment below and follow us on social media for update:
- Facebook: Today Africa
- Instagram: Today Africa
- Twitter: Today Africa
- LinkedIn: Today Africa
- YouTube: Today Africa Studio
