Microsoft Stories $20.1B Quarterly Revenue as It Guarantees to Lead ‘The New AI Platform Shift’

REDMOND, Wash. (AP) — Microsoft on Tuesday reported fiscal fourth-quarter revenue of $20.1 billion, or $2.69 per share, beating analyst expectations for $2.55 per share.

It posted income of $56.2 billion within the April-June interval, up 8% from final yr. Analysts had been on the lookout for income of $55.49 billion, in keeping with FactSet Analysis.

CEO Satya Nadella mentioned the corporate stays targeted on “main the brand new AI platform shift.”

“Organizations are asking not solely how – however how briskly – they’ll apply this subsequent era of AI to handle the most important alternatives and challenges they face – safely and responsibly,” he mentioned in a ready assertion.

Microsoft was an early mover on this yr’s hype around “generative AI” instruments that may help people write documents and create new photos and different media. It capitalized on its multibillion greenback investments in ChatGPT-maker OpenAI to launch a chatbot for Microsoft’s Bing search engine and related instruments tailor-made to its enterprise prospects.

Macquarie analyst Sarah Hindlian-Bowler mentioned traders have been targeted on Microsoft’s early income from these AI investments, the efficiency of the Azure cloud computing platform and the probability that Microsoft will close its deal to purchase online game firm Activision Blizzard, which may assist enhance gaming income and drive extra customers to the Xbox sport system and different Microsoft platforms.

Greater than 18 months after saying the $69 billion deal, Microsoft remains to be negotiating with a British antitrust regulator over issues it should hurt competitors. The U.S. Federal Commerce Fee additionally opposed the transaction however lost a court fight to cease it.

“We nonetheless count on a profitable shut as the corporate works towards an amenable answer that satisfies the U.Okay.’s issues,” Hindlian-Bowler mentioned in an analyst observe forward of Tuesday’s earnings.

Microsoft doesn’t reveal the overall income for its Azure enterprise, although a doc inadvertently disclosed throughout its latest court docket battle with the FTC confirmed it as $34 billion final yr, Hindlian-Bowler mentioned. Microsoft has declined to touch upon that quantity.

Whereas AI has captivated the eye of the general public and traders, Microsoft can also be nonetheless closely reliant on its private computing enterprise centered across the licensing charges paid by the makers of computer systems working its Home windows software program.

Worldwide PC gross sales within the April-June quarter dropped 16.6% from the identical time final yr, marking the seventh consecutive quarter of year-over-year decline, in keeping with market analysis group Gartner. Nevertheless, the market is beginning to stabilize and demand may develop once more in 2024, Gartner mentioned.

Microsoft has laid off a whole lot of staff in latest months, together with many round its headquarters in Redmond, Washington, in keeping with notices it despatched to authorities companies. That is on prime of the ten,000 staff, nearly 5% of its workforce, that it cut earlier this year.

Copyright 2023 The Associated Press. All rights reserved. This materials is probably not printed, broadcast, rewritten or redistributed.