Slide 1: Second Quarter Fiscal Year 2024 Results
ES Microsoft Second Quarter Fiscal Year 2024 Results Satya Nadella Amy Hood Brett Iversen January 30, 2024
Slide 2: Forward-looking statements
This presentation contains forward-looking statements, which are any predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of fa
Slide 3: Financial Summary and Highlights
Financial Summary and Highlights Quarterly Business Highlights Segment Financial Overview Appendix All growth comparisons in this presentation relate to the corresponding period of last fiscal year unless otherwise noted. Numbers may not foot due to rounding.
Slide 4: FY24 Q2 Financial Summary
FY24 Q2 Financial Summary GAAP and CC Results As Adjusted (non-GAAP)* ($ in billions, except per share amounts) FY24 Q2 Growth CC Growth FY24 Q2 Growth CC Growth Productivity and Business Processes $19.2 13% 12% $19.2 13% 12% Intelligent Cloud $25.9 20% 19% $25.9 20% 19% More Personal Computing $16.
Slide 5: Quarterly Commercial Highlights
Quarterly Commercial Highlights Investor Metrics FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 Commercial bookings growth (y/y) 7% [4% 11% / 12% (2)% / (1)% 14% / 17% 17% / 9% Commercial remaining performance obligation (in billions) $189 $196 $224 $212 $222 Commercial revenue annuity mix 96% 96% 97% 96%
Slide 6: FY24 Q2 Other Financial Highlights
FY24 Q2 Other Financial Highlights Cash returned to shareholders Returned $8.4 billion to shareholders with $5.6 billion in dividends and $2.8 billion in share repurchases + Operating expenses were $15.4 billion, up 3% year-over-year driven by 11 points from the Activision acquisition, Operating exp
Slide 7: FY24 Q2 Business Highlights
FY24 Q2 Business Highlights Productivity é and Business Processes Intelligent Cloud More Personal Computing Office Commercial products and cloud services revenue increased 15% (up 13% CC) driven by Office 365 Commercial revenue growth of 17% (up 16% CC) Office Consumer products and cloud services re
Slide 8: Productivity and Business Processes Overview
ge Productivity and Business Processes Overview Investor Metrics FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 Office Commercial products and cloud services revenue growth (y/y) 7% / 14% 13% / 17% 12% / 14% 15% / 14% 15% / 13% Office Consumer products and cloud services revenue growth (y/y) (2)% / 3% 1% [
Slide 9: Productivity and Business Processes Highlights
ge Productivity and Business Processes Highlights Office Commercial LinkedIn * Office Commercial products and cloud services revenue grew 15% (up 13% CC) + LinkedIn revenue grew 9% (up 8% CC) driven by growth across all lines of + Office 365 Commercial revenue grew 17% (up 16% CC) with Office 365 bu
Slide 10: Intelligent Cloud Overview
Intelligent Cloud = Overview Investor Metrics FY23 Q2 FY23 Q3 FY23 Q4 FY24Q1 FY24 Q2 Server products and cloud services revenue growth (y/y) 20% / 26% 17% / 21% 17% / 18% 21% 22% / 20% Growth rates include non-GAAP CC growth (GAAP % / CC %). in bill Total Revenue Sin billions $25.88 + Revenue grew 2
Slide 11: Intelligent Cloud Highlights
Intelligent Cloud = Highlights Server Products and Cloud Services * Server products and cloud services revenue grew 22% (up 20% CC) + Azure and other cloud services revenue grew 30% (up 28% CC) driven by strong demand for our consumption-based services including 6 points from our Al services + Serve
Slide 12: More Personal Computing Overview
+») More Personal Computing Overview Investor Metrics FY23 Q2 FY23 Q3 Windows OEM revenue growth (y/y) (39)% (28)% Windows Commercial products and cloud services revenue growth (y/y) (3)% / 3% 14% / 18% Devices revenue growth (y/y) (39)% / (34)% (30)% / (26)% Xbox content and services revenue growth
Slide 13: Net impact from the Activision acquisition
Net impact from the Activision acquisition FY24 Q2 Net Impact from ($ in billions) Activision Revenue $2.08 Purchase accounting adjustments, $0.58 integration and transaction-related costs . Other cost of revenue $0.35 Cost of revenue $0.93 Gross margin $1.16 Purchase accounting adjustments, $0.55 i
Slide 14: More Personal Computing Highlights
+») More Personal Computing Highlights Windows Gaming + Windows OEM revenue grew 11% as PC market volumes continue stabilizing + Gaming revenue grew 49% (up 48% CC) including 44 points of net impact to pre-pandemic levels from the Activision acquisition + Windows Commercial products and cloud servic
Slide 15: Appendix
Appendix
Slide 16: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Our presentation of second-quarter performance includes non-GAAP financial measures. The following slides provide reconciliations between the GAAP and non- GAAP financial measures presented: + Impact of the Q2 charge * Constant currency reconcil
Slide 17: Impact of the Q2 charge
Impact of the Q2 charge Three Months Ended December 31, rn Gross Operating Operating Effective Net Dilut ed ($ in millions, except per share amounts) Revenue . Earnings Margin Expenses Income Tax Rate Income per Share 2022 As Reported (GAAP) $52,747 $35,259 $14,860 $20,399 19% $16,425 $2.20 Severanc
Slide 18: Constant Currency Reconciliation
Constant Currency Reconciliation Three Months Ended December 31, rn Gross Operating Operating Net Diluted ($ in millions, except per share amounts) Revenue . Earnings Margin Expenses Income Income per Share 2022 As Reported (GAAP) $52,747 $35,259 $14,860 $20,399 $16,425 $2.20 2022 As Adjusted (non-G
Slide 19: Constant Currency Reconciliation: Segment Revenue
Constant Currency Reconciliation Segment Revenue Three Months Ended December 31, 6 in millions) Productivity and Intelligent More Personal Business Processes Cloud Computing 2022 As Reported (GAAP) $17,002 $21,508 $14,237 2023 As Reported (GAAP) $19,249 $25,880 $16,891 Percentage Change Y/Y (GAAP) 1
Slide 20: Constant Currency Reconciliation: Segment Margin and Expenses
Constant Currency Reconciliation Segment Gross Margin Three Months Ended December 31, 2023 Percentage Change Y/Y Percentage Change Y/Y (GAAP) Constant Currency Impact Constant Currency Productivity and Business Processes 14% (2)% 12% Intelligent Cloud 20% (2)% 18% More Personal Computing 34% (2)% 32
Slide 21: Constant Currency Reconciliation: Product and Service Information
Constant Currency Reconciliation Selected Product and Service Information Three Months Ended December 31, 2023 Percentage Change V/Y (GAAP) Constant Currency Impact Petcentage Cureey Commercial bookings 17% (8)% 9% Commercial remaining performance obligation 17% (1)% 16% Microsoft Cloud revenue 24%
Slide 22: Cash Flow Reconciliation
Cash Flow Reconciliation Three Months Ended December 31, Ts Percentage (S in millions) 2023 2022 Change Y/Y Net Cash from Operations (GAAP) $18,853 $11,173 69% Additions to Property and Equipment $(9,735) $(6,274) * Free Cash Flow $9,118 $4,899 86% *Not meaningful. Free cash flow is included as an a
Slide 23: Copyright Microsoft Corporation
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