Microsoft (MSFT) announced its quarterly earnings after the closing bell on Tuesday, beating analysts' expectations on revenue and earnings per share. The tech giant reported revenue of $56.5 billion in the quarter, above consensus estimates of $54.5 billion.
Adjusted earnings per share (EPS) topped out at $2.99 compared with an anticipated $2.66 per share. The company saw adjusted EPS of $2.35 during the same quarter last year.
Shares rose more than 3% in early trading on Wednesday, after Microsoft said higher-than-expected AI consumption boosted its cloud business.
Microsoft's Intelligent Cloud segment, which includes its Azure business, brought in $24.3 billion in the quarter. Wall Street was looking for revenue of $23.6 billion. Azure and other cloud services revenue jumped 29% in the quarter, beating Wall Street's expectations of 27%.
"With copilots, we are making the age of AI real for people and businesses everywhere," Microsoft CEO Satya Nadella said in a statement. "We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.”
The company's Productivity & Business Processes, meanwhile, saw revenue of $18.6 billion, while More Personal Computing took in revenue of $13.7 billion versus analysts' expectations of $18.3 billion and $12.9 billion, respectively.
Microsoft has made AI a cornerstone of its business over the last year, announcing a massive $10 billion investment in ChatGPT developer OpenAI and unveiling generative AI-enhanced versions of its Bing search engine and Edge browser in February.
Since then, the company has launched various generative AI-powered Copilot apps for Outlook, Windows 11, and Microsoft 365. The software can summarize emails, help you draft documents and create PowerPoint presentations, and provide insight into Windows 11 features. Microsoft says it will combine the Copilots into a single app in the future.
The investments are meant to help spark a new growth cycle for Microsoft, as customers look to artificial intelligence as a means of streamlining certain business processes and improving employee efficiency.
In addition to its massive focus on AI capabilities, Microsoft recently closed its $69 billion acquisition of Activision Blizzard. The deal is the largest in Microsoft’s history and instantly makes it the third-largest video game company in the world by revenue behind Tencent and Sony. The Federal Trade Commission, however, could still try to break up the companies on antitrust grounds.
Daniel Howley is the tech editor at Yahoo Finance. He's been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.
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