Microsoft beats by $0.20, beats on revs; Azure +34% CC vs +28-29% CC prior guidance (432.53 +0.58)
- Reports Q1 (Sep) earnings of $3.30 per share, $0.20 better than the FactSet Consensus of $3.10; revenues rose 16.0% year/year to $65.58 bln vs the $64.57 bln FactSet Consensus.
- Azure and other cloud services revenue growth of +33%, +34% constant currency vs +28-29% CC prior guidance.
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Productivity and Business Processes segment revs of $28.3 bln vs $27.75-28.05 bln prior guidance.
- Microsoft 365 Commercial products and cloud services revenue increased 13% (up 14% in constant currency) driven by Microsoft 365 Commercial cloud revenue growth of 15% (up 16% in constant currency).
- Microsoft 365 Consumer products and cloud services revenue increased 5% (up 6% in constant currency) driven by Microsoft 365 Consumer cloud revenue growth of 6% (up 7% in constant currency).
- LinkedIn revenue increased 10% (up 9% in constant currency).
- Dynamics products and cloud services revenue increased 14% driven by Dynamics 365 revenue growth of 18% (up 19% in constant currency).
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Intelligent Cloud segment revs of $24.1 bln vs $23.8-24.1 bln prior guidance.
- Server products and cloud services revenue increased 23% driven by Azure and other cloud services revenue growth of 33% (up 34% in constant currency).
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More Personal Computing segment revs of $13.2 bln vs $12.25-12.65 bln prior guidance.
- Windows OEM and Devices revenue increased 2%.
- Xbox content and services revenue increased 61% driven by 53 points of net impact from the Activision acquisition.
- Search and news advertising revenue excluding traffic acquisition costs increased 18% (up 19% in constant currency).
- "AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process," said Satya Nadella, chairman and chief executive officer of Microsoft. "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....Strong execution by our sales teams and partners delivered a solid start to our fiscal year with Microsoft Cloud revenue of $38.9 billion, up 22% year-over-year," said Amy Hood, executive vice president and chief financial officer of Microsoft.