Microsoft breaks revenue record (again) amid AI boom
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The news: Microsoft's shares are up nearly 2% in after-hours trading after the company reported better-than-expected results for the three months ending September 30.
As is quickly becoming a theme during this American earnings season, CEO Satya Nadella chalked Microsoft's strong performance to returns from its AI investments.
The numbers: Revenue of USD65.5 billion ($99.6 billion) represents a new quarterly record for the storied company, and was over USD1 billion more than analysts expected. It amounts to an earnings-per-share ratio of USD3.30, 4% better than Wall Street expected.
The crucial cloud division boomed 22% compared to the same quarter last year, bringing in USD38.9 billion in revenue. Its Microsoft 365 software suites for business, which feature its AI-powered Copilot, was up 13%.
But while the company is generating cash thanks to its AI investments, it's still spending big on building out its AI infrastructure. Capital expenditure for the quarter was USD20 billion.
The context: With tech titans like Microsoft having made 11-figure bets on AI infrastructure, investors have been awaiting returns and monitoring continued capital expenditure. The last time Microsoft handed down a quarterly result, for the period ending June 30, its shares were battered because its cloud division only grew 21% rather than the 22% Wall Street expected.
Microsoft's strong earnings follow Alphabet's. Earlier in the week the Google owner reported a 15% year-on-year boost in revenue, which was also credited to AI growth.
What they said: “AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process," said Nadella. “We are expanding our opportunity and winning new customers as we help them apply our AI platforms and tools to drive new growth and operating leverage.”
The source: Microsoft
