Microsoft reported $56.517 billion in revenue for the three months ended September 30, 2023, up 13% from $50.122 billion a year earlier. The company announced the fiscal first-quarter results on October 24, 2023. Revenue growth was 12% on a constant-currency basis, while cloud and commercial software delivered the clearest reported growth drivers.
Microsoft’s FY24 Q1 results at a glance
Microsoft’s fiscal year begins in July, so FY24 Q1 covered July through September 2023. The comparison is with the three months ended September 30, 2022. The income-statement figures below are GAAP results.
| Measure | FY24 Q1 | FY23 Q1 | Year-over-year change |
|---|---|---|---|
| Revenue | $56.517 billion | $50.122 billion | 13% |
| Gross margin | $40.215 billion | $34.670 billion | Not stated |
| Operating income | $26.895 billion | $21.518 billion | 25% |
| Net income | $22.291 billion | $17.556 billion | 27% |
| Diluted earnings per share | $2.99 | $2.35 | 27% |
The $6.395 billion increase in revenue equals approximately 12.76% mathematically, which Microsoft reported as 13% after rounding.
Microsoft’s earnings release and its income statement provide the underlying figures.
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Cloud was the main reported growth engine
Microsoft Cloud revenue reached $31.8 billion, an increase of 24% from the prior-year quarter. Azure and other cloud services revenue rose 29%, or 28% in constant currency. Server products and cloud services revenue increased 21%.
These figures support describing cloud as the principal reported driver of the quarter. Microsoft Cloud is broader than Azure: it includes Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365 and other commercial-cloud products. Azure-specific revenue dollars were not separately disclosed in the release.
How each operating segment performed
| Segment | FY24 Q1 revenue | FY23 Q1 revenue | Reported growth | FY24 Q1 operating income |
|---|---|---|---|---|
| Productivity and Business Processes | $18.592 billion | $16.465 billion | 13% | $9.970 billion |
| Intelligent Cloud | $24.259 billion | $20.325 billion | 19% | $11.751 billion |
| More Personal Computing | $13.666 billion | $13.332 billion | 3% | $5.174 billion |
Intelligent Cloud had the fastest segment growth, while More Personal Computing was nearly flat by comparison. Segment revenue and operating-income details are available on Microsoft’s FY24 Q1 segment page.
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Productivity and Business Processes
- Office Commercial products and cloud services revenue increased 15%.
- Office 365 Commercial revenue increased 18%.
- Dynamics products and cloud services revenue increased 22%.
- Dynamics 365 revenue increased 28%.
- LinkedIn revenue increased 8%.
- Microsoft 365 Consumer subscribers reached 76.7 million.
- Office Consumer products and cloud services revenue increased 3%.
The segment’s results show that the commercial subscription and business-application portfolio grew faster than its consumer Office business.
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Intelligent Cloud combines Microsoft’s server, cloud infrastructure and enterprise services. Its 19% segment growth was consistent with the faster expansion reported for Azure and other cloud services. The segment’s operating income rose from $8.978 billion to $11.751 billion.
More Personal Computing
The 3% segment increase concealed a wide split between recurring or service-oriented businesses and hardware:
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- Windows revenue increased 5%.
- Windows OEM revenue increased 4%.
- Windows Commercial products and cloud services revenue increased 8%.
- Devices revenue fell 22%.
- Xbox content and services revenue increased 13%.
- Search and news advertising revenue, excluding traffic acquisition costs, increased 10%.
Accordingly, the quarter was not uniformly strong across Microsoft’s product lines. Devices was the clearest weak spot, even as Windows commercial products, gaming content and advertising grew.
What Microsoft said about AI and Copilot
Chief executive Satya Nadella presented Copilots and artificial intelligence as central to Microsoft’s strategy and described AI as being incorporated across the company’s technology stack. The release did not provide a standalone Copilot revenue figure or an independently reported AI-revenue line.
The disclosed financial evidence therefore supports a precise distinction: cloud growth was clearly reported, while AI was a major strategic theme whose direct revenue contribution was not quantified in this release.
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- 19 HOURS OF BATTERY (LEAVE THE CHARGER) — Up to 19 hours of video playback[3] on a single charge. Work from a coffee shop, take it to class/work, or binge an entire season on a long flight — it'll keep up.
- Two USB-C / USB4[4] ports and a microSD card reader for fast charging, big file transfers, or hooking up to three 4K monitors when you want a full desktop. Wi-Fi 7 keeps you online and fast wherever you are.
Reported growth versus constant currency
Microsoft reported 13% year-over-year revenue growth using its published GAAP results. On a constant-currency basis, revenue growth was 12%. The company’s reconciliation table identified a $301 million constant-currency impact.
Constant currency converts current and comparative results using the earlier period’s exchange rates to remove foreign-exchange movements. It is a non-GAAP analytical measure, so it helps explain currency effects but does not replace the reported $56.517 billion GAAP revenue figure.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Profit grew faster than revenue
Operating income rose 25%, net income rose 27% and diluted EPS rose 27%, all faster than the 13% revenue increase. That pattern indicates substantial operating leverage during the quarter, although detailed margin conclusions should be drawn from the full income statement rather than from revenue growth alone.
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- Brilliant Display – Stunning 13.8" PixelSense touchscreen[1], with brilliant LCD display[2], unleashes luminous whites, deeper blacks and colors so richly saturated bringing vivid life into every frame – perfect for work, school, streaming and creative tasks.
- Power that lasts all day – With 20 hours of battery life[3], the new Surface Laptop powers through your entire day, so you can create, work and stream from morning to night without reaching for a charger.
- Work at the speed of your ideas – Built with the latest Qualcomm Snapdragon X2 Elite (12 Core) processors, Surface Laptop delivers fast, AI‑accelerated performance—making it the most powerful Surface laptop for everything from multitasking to demanding workloads.
- The ports you need – Charge on-the-go, transfer data fast, or create the ultimate desktop set up with two USB-C / USB4[4] ports.
- Built-in AI Companion – Work smarter, create freely, and communicate with confidence—Copilot[5] on Windows 11 is always there to help.
Cash returned to shareholders
Microsoft said it returned $9.1 billion to shareholders through share repurchases and dividends during FY24 Q1. That was a one-quarter total for the period ended September 30, 2023.
What the quarter does—and does not—show
- It shows: a strong companywide quarter led by Intelligent Cloud, Microsoft Cloud and commercial software.
- It shows: profit and per-share earnings growing faster than revenue.
- It shows: a modest currency effect, with reported growth one percentage point above constant-currency growth.
- It does not show: a separately quantified amount of Copilot or AI revenue.
- It does not show: broad strength in every category, because More Personal Computing grew only 3% and Devices revenue declined 22%.
The FY24 Q1 announcement is therefore best read as a cloud- and commercial-software-led earnings report, not as proof that every part of Microsoft’s portfolio accelerated equally.
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