Microsoft Cloud Revenue Hits $63.9 Billion As Azure Grows 48% And Equipment Spending Doubles
Net income rose 32% to $36.6 billion, while additions to property and equipment reached $39,367 million, against $19,394 million a year earlier.
Microsoft Cloud revenue reached $63.9 billion in the September quarter, up 30%, and Azure grew 48%, the company said Wednesday in its fiscal first-quarter results. Spending on property and equipment roughly doubled from a year earlier.
Cloud growth speeds up
Microsoft Cloud growth accelerated to 30%, or 31% in constant currency, CFO Amy Hood said. Azure revenue was $33,165 million, against $22,384 million a year earlier, according to the release's income tables.
Total revenue was $92.3 billion, up 19%. Operating income was $45.9 billion, up 21%. Net income was $36.6 billion, up 32% on a standard accounting basis, and diluted earnings per share were $4.92.
On an adjusted basis, which strips out the effect of Microsoft's investments in OpenAI, net income was $36.4 billion, up 18%. A year earlier, OpenAI-related losses cut net income by $3.1 billion; this quarter they added $207 million.
Commercial remaining performance obligation, which tracks contracted revenue not yet recognized, rose 73% to $677 billion. Hood said results "exceeded expectations across revenue, operating income, and earnings per share."
Spending on equipment doubles
Additions to property and equipment came to $39,367 million, against $19,394 million a year before. Net cash from operations rose to $58,000 million from $45,057 million.
The company returned $10.2 billion to shareholders through dividends and buybacks. CEO Satya Nadella said Microsoft is "translating our innovation into growing adoption and real-world impact across every industry."
Ahead of the report, Morningstar's Dan Romanoff wrote that management had guided to first-quarter capital spending above $50 billion. He noted Azure growth was 43% in the prior quarter, with guidance for roughly 44% to 45% in constant currency this quarter.
Weakness in devices
Microsoft, which makes Windows, Microsoft 365, Azure, Xbox and Surface, reports in two segments after a September change. Agents and Infra revenue was $76.8 billion, up 25%. Devices and Consumer revenue was $15.5 billion, down 3%.
Windows OEM and devices revenue fell 22%, and Xbox content and services slipped 2%. Search and advertising excluding traffic acquisition costs rose 12%. Microsoft 365 commercial cloud revenue rose 17% as reported.
Management gives its forward guidance, including its outlook, on a call at 5:30 p.m. Eastern on Wednesday.
Sources
- 8-K Filing — MICROSOFT CORP (MSFT) — SEC EDGAR
- Exhibit msft-ex99_1.htm — MICROSOFT CORP 8-K exhibit — SEC EDGAR
- Microsoft Stock Is Up 10% This Year. Is It Still a Buy Ahead of Earnings? | Morningstar — morningstar.com
