Microsoft CEO Satya Nadella speaks at Axel Springer Neubau in Berlin on Oct. 17, 2023.
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Microsoft reported better-than-expected results for its fiscal first quarter as revenue in the company’s Azure cloud business jumped 40%. The stock slipped in extended trading.
- Earnings per share: $4.13 adjusted vs. $3.67 per share expected
- Revenue: $77.67 billion vs. $75.33 billion expected
Revenue increased 18% in the fiscal first quarter from $65.6 billion a year ago, according to a release. Net income increased to $27.7 billion, or $3.72 per share, from $24.67 billion, or $3.30 per share, during the same period last year.
Microsoft’s Intelligent Cloud unit, which includes the Azure cloud, reported $30.9 billion in revenue, up 28% and above the StreetAccount consensus of $30.25 billion.
During the fiscal first quarter, revenue from Azure grew 40%, or 39% in constant currency. Analysts polled by StreetAccount had anticipated 38.2%.
The company’s Productivity and Business Processes segment, which is home to Office productivity software and LinkedIn, delivered $33.0 billion in revenue, above the $32.33 billion consensus among analysts polled by StreetAccount.
Microsoft’s More Personal Computing unit, which encompasses Windows, search advertising, devices and video games, reported $13.8 billion in revenue. The number was up 4% and above StreetAccount’s $12.83 billion consensus.
Cloud continues to be the big driver of growth at Microsoft, as the business has proven to be a major beneficiary of the artificial intelligence boom. Last quarter, Microsoft disclosed the scale of its Azure cloud infrastructure business in dollars for the first time. The company said revenue in fiscal 2025 from Azure and other cloud services jumped 34% from the prior year to more than $75 billion.
Much of Microsoft’s AI momentum has been attributed to its tight relationship with OpenAI.
On Tuesday, OpenAI announced it has completed its restructuring and formally outlined Microsoft’s stake in the company. Under the new structure, OpenAI’s nonprofit will hold a 26% stake in its for-profit arm, worth about $130 billion. Microsoft will hold a 27% stake worth about $135 billion, and current and former employees and investors will own the remaining 47%.
Microsoft is scheduled to hold its quarterly call with investors at 5:30 p.m. ET.
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