Microsoft experienced a 2% decline in shares during extended trading after revealing its fiscal second-quarter results, surpassing analysts’ expectations. The software giant reported earnings of $2.93 per share, exceeding the estimated $2.78 per share. Additionally, Microsoft’s revenue for the quarter stood at $62.02 billion, outperforming the expected $61.12 billion.
Fiscal Outlook and Analyst Expectations
Despite impressive results, Microsoft provided a cautious fiscal third-quarter revenue outlook, projecting a range between $60 billion and $61 billion, with $60.50 billion at the midpoint. Analysts polled by LSEG had anticipated slightly higher at $60.93 billion. However, the company foresees lower-than-expected costs of revenue and operating expenses in the upcoming quarter.
Year-Over-Year Growth
Microsoft demonstrated robust year-over-year growth, with revenue surging by 17.6% in the quarter ending on December 31. Net income rose to $21.87 billion, or $2.93 per share, compared to $16.43 billion, or $2.20 per share in the same period the previous year.
Intelligent Cloud Segment Highlights
The Intelligent Cloud segment played a pivotal role in Microsoft’s success, generating $25.88 billion in revenue, marking a 20% increase. This segment encompasses Azure cloud infrastructure, SQL Server, Windows Server, Nuance, GitHub, and enterprise services. Azure and other cloud services within this segment experienced a remarkable 30% growth, surpassing expectations.
Azure’s AI Milestones
Microsoft reported significant achievements in its Azure AI offerings, boasting 53,000 Azure AI customers, with one-third being new additions in the past year. Six points of the growth in Azure and other cloud services were attributed to artificial intelligence, as disclosed by Amy Hood, Microsoft’s finance chief.
Commitments to Azure
CEO Satya Nadella highlighted a notable increase in commitments to spend over $1 billion on Azure, emphasizing the platform’s growing significance and adoption.
Segment-wise Breakdown
Revenue from the Productivity and Business Processes unit, including Office productivity software, LinkedIn, and Dynamics, reached $19.25 billion, exceeding the StreetAccount consensus. The More Personal Computing segment, comprising Windows, Surface, Bing, and Xbox, contributed $16.89 billion in revenue, showing a substantial 19% increase and slightly exceeding analyst expectations.
