Microsoft beats by $0.12, beats on revs; Azure +31% CC vs +31-32% CC prior guidance; IC segment revs a bit light of guidance (442.33 -4.87)
- Reports Q2 (Dec) earnings of $3.23 per share, $0.12 better than the FactSet Consensus of $3.11; revenues rose 12% year/year to $69.63 bln vs the $68.87 bln FactSet Consensus.
- Azure and other cloud services revenue growth of +31%, +31% constant currency vs +31-32% CC prior guidance.
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Productivity and Business Processes segment revs grew 14% (+13% CC) to $29.4 bln vs $28.70-29.00 bln prior guidance.
- Microsoft 365 Commercial products and cloud services revenue increased 15%, driven by Microsoft 365 Commercial cloud revenue growth of 16% (up 15% in constant currency).
- Microsoft 365 Consumer products and cloud services revenue increased 8% driven by Microsoft 365 Consumer cloud revenue growth of 8%.
- LinkedIn revenue increased 9%.
- Dynamics products and cloud services revenue increased 15% (+14% CC) driven by Dynamics 365 revenue growth of 19% (+18% CC).
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Intelligent Cloud segment revs grew 19% to $25.5 bln vs $25.55-25.85 bln prior guidance.
- Server products and cloud services revenue increased 21% driven by Azure and other cloud services revenue growth of 31%.
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More Personal Computing segment revs were flat yr/yr at $14.7 bln vs $13.85-14.25 bln prior guidance.
- Windows OEM and Devices revenue increased 4%.
- Xbox content and services revenue increased 2%.
- Search and news advertising revenue excluding traffic acquisition costs increased 21% (+20% CC).
- "We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead," said Satya Nadella, chairman and chief executive officer of Microsoft. "Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year... This quarter Microsoft Cloud revenue was $40.9 billion, up 21% year-over-year," said Amy Hood, executive vice president and chief financial officer of Microsoft. "We remain committed to balancing operational discipline with continued investments in our cloud and AI infrastructure."