Microsoft reported revenue of $56.2 billion for its fiscal fourth quarter, up 8%, exceeding Wall Street’s expectations of $55.47 billion. Profits rose 20% to $20.1 billion.
Earnings per share were $2.69, up 21%, beating expectations of $2.55 per share.
- The company said its overarching Microsoft Cloud offerings drove much of the growth, with quarterly revenue of $30.3 billion, marking a 21% increase year-over-year.
- The Intelligent Cloud segment saw a revenue growth of 15%, amounting to $24 billion, largely due to an increase in Azure and other cloud services revenue.
- The company’s More Personal Computing segment posted a 4% decline in revenue, mainly from decreases in Windows sales to computer makers and devices revenue.
The report comes amid a flurry of AI product development at the company. Microsoft is incorporating new forms of artificial intelligence “copilots” across its software and cloud services. They include homegrown technologies and those licensed from its partner, ChatGPT maker OpenAI, in which Microsoft has invested billions of dollars.
Investors are watching Microsoft closely as a barometer of the economy and tech spending. It’s one of the first tech giants to report earnings this week and next. Google Cloud likewise posted its second straight profitable quarter on 28% revenue growth in parent company Alphabet’s earnings report Tuesday.
Pricing news for Microsoft 365 Copilot sent Microsoft shares soaring to a new record last week. However, the product is available only as a preview for now with a limited customer base.
For now, the company’s results don’t reflect much revenue impact from artificial intelligence, said James Ambrose, Microsoft director of investor relations, in a call with GeekWire shortly after the results were released.
“We’re still early in our journey,” Ambrose said.
Microsoft’s earnings conference call is at 2:30 p.m. Pacific.
Update, July 26: Microsoft stock fell more than 4% Wednesday after the company issued guidance for the current quarter that fell below analyst expectations.
