Microsoft Corp

Microsoft reported Q2 FY2025 revenue of $69.6B (up 12% YoY) and net income of $24.1B (up 10% YoY), with diluted EPS of $3.23.

Revenue increased $7.6 billion or 12% driven by growth in Intelligent Cloud and Productivity and Business Processes, according to the MD&A. Operating income increased $4.6 billion or 17% driven by growth across each of our segments. Net income rose 10% to $24.1B, a slower rate than operating income, partly reflecting a larger other expense, net of $2.3B versus $0.5B in the prior-year quarter.

Operating income of $31,653M includes net recognized losses on investments of $860M and net losses on derivatives of $116M within other expense, net. The filing does not define an adjusted or core earnings measure.

Capital expenditures $15.8B (prior $9.7B) (selected cash-flow amount, not necessarily total capital investment).

“Cash from operations increased $7.0 billion to $56.5 billion for the six months ended December 31, 2024, primarily due to an increase in cash received from customers, offset in part by an increase in cash paid to suppliers and employees and cash used to pay income taxes. Cash used in financing increased $32.4 billion to $27.8 billion for the six months ended December 31, 2024, primarily due to $6.7 billion in cash used for repayments of debt, net of proceeds in the current period compared to $23.6 billion in proceeds from the issuance of debt, net of repayments in the prior period. Cash used in investing decreased $42.1 billion to $29.3 billion for the six months ended December 31, 2024, primarily due to a $63.0 billion decrease in cash used for acquisitions of companies, net of cash acquired, and purchases of intangible and other assets, offset in part by an $11.1 billion increase in additions to property and equipment and an $8.5 billion decrease in cash from net investment purchases, sales, and maturities.”

— Filing statement

“For the six months ended December 31, 2024 and 2023, we repurchased 15 million shares and 18 million shares of our common stock for $6.3 billion and $6.4 billion, respectively, through our share repurchase program.”

— Filing statement

“For the six months ended December 31, 2024 and 2023, our Board of Directors declared dividends totaling $12.3 billion and $11.1 billion, respectively.”

— Filing statement

Return on equity was 8.0% (prior 9.2%) (period net income / period-end equity, not annualized); return on assets 4.5% (period net income / period-end assets, not annualized).

No specific financial guidance was provided in the filing. Management stated expectations for capital expenditures to increase in coming years to support growth in cloud offerings and AI infrastructure.

“We expect capital expenditures to increase in coming years to support growth in our cloud offerings and our investments in AI infrastructure and training.”

— ManagementVerified in filing

Leverage: Identified debt as of 2024-12-31: reported debt balance of unestablished maturity scope of $39.7B. The concept behind this balance does not establish which maturities it covers. Total debt, net debt and debt-to-equity are therefore not stated.

Liquidity: Cash, cash equivalents, and short-term investments totaled $71.6 billion as of December 31, 2024, compared to $75.5 billion as of June 30, 2024.

Cash flow: Cash flow — operating $22.3B, investing $-14.1B, financing $-11.2B.

Working capital: Current assets $147.1B vs. current liabilities $108.9B (current ratio 1.35x). Prior reported balance sheet as of 2024-06-30: $159.7B vs. $125.3B (1.27x).