Microsoft Corporation stock research
FY2024 Q4
Microsoft (MSFT) Gross Margin — Quarter Ended Jun 30, 2024
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin weakened slightly from the prior quarter and was lower than the same quarter last year, as cost of revenue grew at a faster pace relative to revenue.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q4
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin weakened slightly from the prior quarter and was lower than the same quarter last year, as cost of revenue grew at a faster pace relative to revenue.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue increased while cost of revenue also rose, but the cost increase outpaced revenue growth, leading to a slight margin compression.
- Compared to the immediately preceding quarter, gross margin was slightly lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
69.6%
Gross profit
$45.0B
Revenue
$64.7B
Cost of revenue
$19.7B
Quarter-over-quarter change
-0.5 pts
Year-over-year change
-0.5 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Sep 30, 2023 | $56.5B | $40.2B | $16.3B | 71.2% |
| Dec 31, 2023 | $62.0B | $42.4B | $19.6B | 68.4% |
| Mar 31, 2024 | $61.9B | $43.4B | $18.5B | 70.1% |
| Jun 30, 2024 | $64.7B | $45.0B | $19.7B | 69.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-0.5 pts
Year-over-year change
Jun 30, 2023
-0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue increased while cost of revenue also rose, but the cost increase outpaced revenue growth, leading to a slight margin compression.
Compared to the immediately preceding quarter, gross margin was slightly lower; compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons.
Monitor the trajectory of cost of revenue relative to revenue, as its faster growth contributed to the margin decline.