Microsoft Q2 earnings beat estimates but cloud growth slows

The news: Microsoft reported slower than expected growth in its Azure cloud business despite beating Wall Street estimates for second-quarter revenue, sending the company's shares lower.

The numbers: Overall revenue for the December quarter rose 12% to USD69.6 billion ($111.70 billion), exceeding the consensus estimate of USD68.78 billion. Earnings per share of USD3.23 topped expectations of USD3.11. However, the Azure unit reported revenue growth of 31%, missing analyst estimates of 31.8%.

Microsoft shares were down 1.6% in after hours trading in New York.

The context: Revenue from Microsoft’s Intelligent Cloud unit, which houses the Azure cloud computing platform, rose to USD25.54 billion, missing estimates of $25.76 billion.

Earlier on Thursday, Microsoft said it has made Chinese startup DeepSeek's R1 artificial intelligence model available on its Azure platform and GitHub tool for developers. The AI model will be available in the model catalog on the platforms and will join more than 1,800 models that Microsoft is offering.