Microsoft (MSFT) -) posted stronger-than-expected first quarter earnings late Tuesday, powered once again by gains it is cloud division, with the tech giant highlighting its first-mover advantage in AI to boost near-term profits.
Microsoft said revenues for Azure, its flagship cloud division, rose 29% from last year over the three months ending in September, just ahead of the 26% to 28% Street forecast but slowing from earlier gains in the mid to high 40% range as companies continue to pull back on digital infrastructure spending amid global macro uncertainty.
Overall group revenues, however, rose 12.7% to $56.52 billion for Microsoft's fiscal first quarter, coming in just ahead of analysts' estimates of a $55.47 billion tally. Intelligent Cloud revenues were pegged at $24.3 billion, up 19% from the same period last year and just ahead of the Street's $24 billion forecast.
Microsoft's adjusted earnings rose 27.2% from last year to $2.99 per share, well ahead of the Street consensus forecast of $2.65 per share. Net income rose 20% to $20.1 billion.
"With copilots, we are making the age of AI real for people and businesses everywhere," said CEO Satya Nadella. "We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.”
Microsoft shares were marked 4.95% higher in after-hours trading immediately following the earnings release to indicate a Wednesday opening bell price of $3456.88 each.
Productivity and business division revenues, which includes Office 365, were up 13% from last year to $24.3 billion, Microsoft said, while More Personal Computing revenues, which includes Windows, were up 3% to $13.7 billion.
“Consistent execution by our sales teams and partners drove a strong start to the fiscal year with Microsoft Cloud revenue of $31.8 billion, up 24% (up 23% in constant currency) year-over-year,” said CFO Amy Hood.
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