Microsoft(MSFT) - 2024 Q4 - Annual Report

Cloud and AI Growth - Microsoft Cloud revenue increased 23% to $137.4 billion[240] - Microsoft's AI offerings, including Copilot and the Copilot stack, are driving AI transformation across industries[385] - Azure AI is helping organizations transform by delivering intelligence and insights with enterprise-level responsible AI and security protections[390] - Microsoft Fabric is an end-to-end, unified analytics platform integrating data and analytics tools[391] - Azure's competitive advantage includes hybrid cloud capabilities and global scale for businesses of all sizes[409] - Microsoft is investing in AI and ambient intelligence to revolutionize work processes and provide productivity gains[394] Financial Performance - Revenue for 2024 increased by 16% to $245.122 billion, compared to $211.915 billion in 2023[438] - Gross margin for 2024 rose by 17% to $171.008 billion, up from $146.052 billion in 2023[438] - Operating income for 2024 grew by 24% to $109.433 billion, compared to $88.523 billion in 2023[438] - Net income for 2024 increased by 22% to $88.136 billion, up from $72.361 billion in 2023[438] - Gaming gross margin increased by $6.8 billion or 23%, driven by the Activision Blizzard acquisition and growth in Windows[440] - Operating expenses increased by $3.9 billion or 31%, with 34 points of growth attributed to the Activision Blizzard acquisition[440] Business Applications and Licensing - Dynamics 365 revenue is driven by user licenses, application consumption, and the shift to cloud-based intelligent business applications[405] - Office Consumer revenue is influenced by the shift from on-premises licenses to Microsoft 365 Consumer subscriptions[404] - The company distributes products through OEMs, with the largest component being the Windows operating system pre-installed on devices[422] - Enterprise Agreements allow large organizations to license Microsoft products and services organization-wide over a three-year period[428] Gaming and Entertainment - Xbox Game Pass offers access to a curated library of over 400 first- and third-party console and PC titles[413] Sustainability and Corporate Responsibility - Microsoft aims to be carbon negative, water positive, and zero waste by 2030[395] Intellectual Property and Innovation - The company holds a portfolio of over 63,000 U.S. and international patents issued and over 23,000 pending worldwide[419] Global Risks and Challenges - Microsoft's global business faces risks from geopolitical instability, economic conditions, and currency fluctuations[247] Corporate Governance and Compensation - Microsoft Corporation Deferred Compensation Plan for Non-Employee Directors filed on 1/31/2018[446] - Microsoft Corporation 2017 Stock Plan filed on 10/16/2017[446] - Form of Stock Award Agreement under the Microsoft Corporation 2017 Stock Plan filed on 4/26/2018[446] - Form of Performance Stock Award Agreement under the Microsoft Corporation 2017 Stock Plan filed on 4/26/2018[446] - Amended and Restated Officers' Indemnification Trust Agreement filed on 10/20/2016[446] - Assumption of Beneficiaries' Representative Obligations under Amended and Restated Officers' Indemnification Trust Agreement filed on 7/30/2020[446] - Form of Indemnification Agreement and Amended and Restated Directors' Indemnification Trust Agreement filed on 8/1/2019[446] - Assumption of Beneficiaries' Representative Obligations under Amended and Restated Directors' Indemnification Trust Agreement filed on 7/30/2020[446] - Microsoft Corporation Executive Incentive Plan filed on 9/19/2018[446] - Senior Executive Severance Benefit Plan filed on 10/20/2016[446]