Microsoft CEO Satya Nadella speaks at an internal event on AI technology in Jakarta, Indonesia, Tuesday, April 30, 2024.
Dimas Ardian | Bloomberg | Getty Images
microsoft on Wednesday reported higher first-quarter profits and revenue as its Azure cloud infrastructure business grew faster than expected.
Here’s how the company performed compared to Wall Street’s expectations, based on a survey of analysts by LSEG.
Earnings per share: $3.30 vs. $3.10 expected Revenue: $65.59 billion vs. $64.51 billion expected
Microsoft’s revenue rose 16% year over year in the fourth quarter ended Sept. 30, according to a statement. Net income was $24.67 billion, up from $22.29 billion in the same period last year.
Microsoft announced in August that it would revise its business segment reporting to reflect its management approach. Mobility and Security Services, along with a portion of Windows revenue, are part of the Productivity and Business Processes segment, which includes Office software.
Revenue from productivity and business processes reached $28.32 billion in the quarter. This number is up 12% and beats the $27.9 billion consensus among analysts surveyed by StreetAccount. The actual total includes changes and is 38% higher than the midpoint of management’s July forecast of $20.45 billion.
For the first time, revenue growth metrics for Azure and other cloud services exclude mobility and security and Power BI data analytics sales, giving investors a clearer picture of Microsoft’s cloud computing consumption. It has become. Azure’s growth rate for the quarter was 33%, with 12 points of that coming from artificial intelligence services. CNBC’s consensus for Azure growth was 32.8%, while StreetAccount’s consensus was 29.4%.
“Demand continues to exceed our available capacity,” Amy Hood, Microsoft’s finance chief, said on a conference call with analysts.
The overall Intelligent Cloud segment, which includes Azure, Windows Server, and Enterprise Services, generated $24.09 billion in revenue. This is an increase of 20% and slightly above the StreetAccount consensus of $24.04.
on tuesday, google reported that its rival’s cloud business grew 35% annually to $11.35 billion. AmazonThe company, which is a leader in the cloud infrastructure market, is scheduled to announce its financial results on Thursday.
Microsoft has reduced the size of a segment called “More Personal Computing” in a change to its report. In the fiscal first quarter, it contributed $13.18 billion to revenue. This is an increase of about 17% and beats the StreetAccount consensus of $12.56 billion.
The company reported a 2% increase in device sales and Windows operating system license sales to device manufacturers. Industry research firm Gartner estimates PC shipments fell 1.3% in the quarter.
During the quarter, Microsoft worked to help customers recover after a defective update. cloud strike Security software brought down Windows PCs around the world. Microsoft announced it will collaborate with BlackRock on an artificial intelligence infrastructure investment fund with an initial capital target of $30 billion.
As Microsoft ramps up spending on chips to build out its infrastructure and handle more demanding workloads, the company’s AI investments continue to be a big focus for investors. Microsoft is a major investor in OpenAI, the creator of ChatGPT, valued at $157 billion in a funding round earlier this month.
As of Sept. 30, Microsoft had amassed more than $108 billion in uncommitted finance leases, which UBS analysts say could include third-party cloud spending to meet AI demand. It is said that there is a sex.
At the same time, Microsoft is spending more cash on property and equipment. In the first quarter of the fiscal year, revenues increased 50% year over year to $14.92 billion. Analyst consensus compiled by Capital IQ was $14.58 billion.
As of Wednesday’s close, Microsoft is up about 15% since the beginning of the year, while the Nasdaq is up about 24% in the same period.
Executives are scheduled to discuss the results and issue guidance on a conference call with analysts beginning at 5:30 p.m. ET.
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Correction: An earlier version of this article had the quarter end date incorrect. It was September 30th.