Revenue increased to $50.1 billion from $45.32 billion a year ago. Microsoft reported fiscal first-quarter earnings of $17.56 billion, or $2.35 a share, down from $2.71 a share in the same quarter a year ago, when the tech giant disclosed a 44 cent-per-share tax benefit. stockįell more than 4% in after-hours trading. Shares closed with a 1.4% increase at $250.66.Ĭoncerns about cloud growth immediately spread to Azure’s biggest competitor, Amazon Web Services, as Inc. Microsoft shares slid to declines of more than 6% in after-hours trading following Hood’s forecast, which was provided in a conference call. “And you should expect to see our operating-expense growth moderate materially through the year while we focus on growing productivity of the significant head-count investments we’ve made over the last year.” “While we continue to help our customers do more with less, we will do the same internally,” she said. Hood also suggested that more cost cuts could be coming to Microsoft, after the company confirmed layoffs of fewer than 1,000 employees earlier this month. In the current quarter, Chief Financial Officer Amy Hood suggested a similar sequential decline is in store for Azure, saying percentage growth should decline by five points on a constant-currency basis. “I do think people are going to look at how can they complement their spend with essentially these Copilots in order to drive more efficiency and, quite frankly, even reduce the burden and drudgery of work on their OpEx and their people and so on,” he said.Įvercore’s Materne called the overall results “solid” amid “a lot of macro headwinds.” Microsoft’s investment story “gets stronger in as some optical headwinds reverse and soften, and Microsoft’s position in the enterprise market continues to get stronger as customers look to consolidate spending,” he wrote.Opinion: The cloud boom is coming back to Earth, and that could be scary for tech stocks Nadella, meanwhile, expressed optimism about the eventual opportunities brought upon by Microsoft’s Copilot offerings. The FactSet consensus was for $13.6 billion. Revenue for the More Personal Computing segment, which includes Windows and Xbox content and services, dropped 4% to $13.9 billion and was off 3% on a constant-currency basis. Analysts had been looking for $18.1 billion. That part of the business includes LinkedIn and both commercial and consumer versions of Office. Microsoft logged $18.3 billion in revenue for its productivity and business processes unit, up 10% from a year before, or up 12% in constant currency. See also: Microsoft bulls are excited as company reveals pricing for AI offering Overall revenue for Microsoft climbed to $56.2 billion from $51.9 billion, whereas analysts had been expecting $55.5 billion. Analysts tracked by FactSet were modeling $2.55 a share. The company generated fiscal fourth-quarter net income of $20.1 billion, or $2.69 a share, compared with $16.7 billion, or $2.23 a share, in the year-earlier period. “We think of that, again, being pretty expansive from a TAM opportunity and we’ll play it out,” he continued, though the company is also up against the “law of large numbers” given the massive scale of its cloud business. The cloud migration is still in the “early innings,” Chief Executive Satya Nadella said on the call, while also highlighting a “new world of AI driving a set of new workloads.” “While we believe the Street was hoping for Azure growth more in the ~28% range, we believe the consumption part of the business held up well,” Evercore ISI analyst Kirk Materne said in a note to clients.įor the September quarter, Microsoft anticipates 25% to 26% in constant-currency Azure growth. The FactSet consensus was for 27% growth in constant currency. Microsoft’s forecast had been for 26% to 27% in constant-currency Azure sales growth, while the company posted 31% constant-currency growth on the metric in the March period. The company said revenue for Azure and other cloud services was up 26%, or 27% in constant currency. The growth rate was 17% on a currency-neutral basis. Revenue for the segment came in at $24.0 billion, while analysts had been anticipating $23.8 billion. Hood’s commentary came as Microsoft posted fiscal fourth-quarter results Tuesday afternoon that showed a 15% jump in revenue for the company’s cloud-computing segment, which it calls Intelligent Cloud. Meanwhile, she expects that Microsoft’s capital expenditures will rise sequentially each quarter “as we scale to meet demand signals.” Microsoft’s AI revenue impacts will thus be weighted toward the second half of the new fiscal year that just began, she continued.
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