Microsoft on Tuesday reported fiscal fourth-quarter profit of $20.1 billion, or $2.69 per share, beating analyst expectations for $2.55 per share.
It posted revenue of $56.2 billion in the April-June period, up 8 per cent from last year. Analysts had been looking for revenue of $55.49 billion, according to FactSet Research.
CEO Satya Nadella said the company remains focused on leading the new AI platform shift.
Organizations are asking not only how but how fast they can apply this next generation of AI to address the biggest opportunities and challenges they face safely and responsibly, he said in a prepared statement.
Microsoft was an early mover in this year's hype around generative AI tools that can help people write documents and create new images and other media. It capitalized on its multibillion dollar investments in ChatGPT-maker OpenAI to launch a chatbot for Microsoft's Bing search engine and similar tools tailored to its business customers.
Macquarie analyst Sarah Hindlian-Bowler said investors have been focused on Microsoft's early revenue from those AI investments, the performance of the Azure cloud computing platform and the likelihood that Microsoft will close its deal to buy video game company Activision Blizzard, which could help boost gaming revenue and drive more users to the Xbox game system and other Microsoft platforms.
Also Read
Tesla chief Elon Musk threatens to sue Microsoft for using data 'illegally'
Microsoft 365 Copilot: Microsoft is bringing AI to its productivity apps
Microsoft freezes salaries of full-time workers due to economic uncertainty
Microsoft, Activision CEOs to defend $69 billion deal in fight with FTC
Online used-car marketplace Shift Technologies lays off 30% of workforce
Some Airbus jets with P&W engines will need to be removed, inspected
BRICS NSA meet: Doval calls terrorism one of key threats to national peace
US rejects plea to release radioactive water from nuclear plan into sea
Russian President Vladimir Putin plans to visit China in October: Kremlin
China agrees to reschedule Pakistan's $2 billion debt recovery for 2 years
More than 18 months after announcing the $69 billion deal, Microsoft is still negotiating with a British antitrust regulator over concerns it will harm competition. The U.S. Federal Trade Commission also opposed the transaction but lost a court fight to stop it.
We still expect a successful close as the company works toward an amenable solution that satisfies the U.K.'s concerns, Hindlian-Bowler said in an analyst note ahead of Tuesday's earnings.
Microsoft doesn't reveal the total revenue for its Azure business, though a document inadvertently disclosed during its recent court fight with the FTC showed it as $34 billion last year, Hindlian-Bowler said. Microsoft has declined to comment on that number.
While AI has captivated the attention of the public and investors, Microsoft is also still heavily reliant on its personal computing business centered around the licensing fees paid by the makers of computers running its Windows software.
Worldwide PC sales in the April-June quarter dropped 16.6 per cent from the same time last year, marking the seventh consecutive quarter of year-over-year decline, according to market research group Gartner. However, the market is starting to stabilize and demand could grow again in 2024, Gartner said.
Microsoft has laid off hundreds of workers in recent months, including many around its headquarters in Redmond, Washington, according to notices it sent to government agencies. That's on top of the 10,000 employees, almost 5 per cent of its workforce, that it cut earlier this year.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)