Microsoft(US:MSFT) Guohai Securities·2024-11-03 02:17Investment Rating - The report maintains a "Buy" rating for Microsoft (MSFT) [2] Core Insights - Microsoft's overall financial performance is positively influenced by AI-driven business growth, with significant revenue increases across its major business segments [3] - The company reported Q1 FY2025 revenue of $65.585 billion, a year-over-year increase of 16.04%, and a net profit of $24.667 billion, up 10.66% year-over-year [2][3] - The intelligent cloud segment saw the most substantial growth, with a revenue increase of 20% year-over-year, while personal computing and productivity segments also showed strong growth [3] Financial Performance Summary - For Q1 FY2025, Microsoft achieved a gross margin of approximately 69.35% and a net margin of about 37.61% [2] - The capital expenditure (Capex) for the quarter reached $20 billion, with cash spending of $14.9 billion [3] - The productivity and business processes segment generated $28.3 billion in revenue, accounting for 43% of total revenue, driven primarily by Microsoft 365 [3] - The intelligent cloud segment's revenue was $20 billion, with Azure and other cloud services growing by 33% year-over-year [3] - The more personal computing segment reported $13.2 billion in revenue, with Xbox content and services revenue increasing by 61% [5] Future Outlook - For Q2 FY2025, Microsoft expects productivity and business processes revenue to be between $28.7 billion and $29 billion, representing a year-over-year growth of 50% [6] - The intelligent cloud revenue is projected to be between $25.55 billion and $25.85 billion, with a slight year-over-year decrease [6] - More personal computing revenue is anticipated to be between $13.85 billion and $14.25 billion, reflecting a year-over-year decrease of 17% [6] Valuation Metrics - The report forecasts FY2025 revenue of $285 billion and net profit of $101.8 billion, with corresponding P/S ratios of 10.60X and P/E ratios of 29.69X [6][7] - For FY2026, revenue is expected to reach $329.9 billion with a net profit of $117.2 billion, leading to P/S and P/E ratios of 9.16X and 25.78X respectively [6][7]