Microsoft Corp’s cloud computing and artificial intelligence (AI) business helped deliver US$70.1 billion in sales and boosted profits by 18 percent for the January-March quarter, a dose of relief for investors during a turbulent time for the tech sector and the US economy.
The company, which celebrates its 50th anniversary this year, reported quarterly net income of US$25.8 billion, or US$3.46 per share, beating analysts’ forecasts of earnings of US$3.22 a share.
The Redmond, Washington-based software maker posted revenue of US$70.1 billion in the period, up 13 percent from the same period a year ago and also beating analysts’ expectations. Analysts polled by FactSet expected Microsoft to post revenue of US$68.44 billion for the quarter.
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Microsoft CEO Satya Nadella credited cloud growth for its strong quarter. The company’s cloud unit posted revenue of US$26.8 billion, up 21 percent year-on-year and beating analysts’ projections of US$26.17 billion.
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Nadella said in a statement.
The company also saw a 6 percent increase to US$13.4 billion in revenue in its personal computing unit, which includes its laptop business and Xbox services.
Microsoft in January said it was on track to pump about US$80 billion into capital and infrastructure this fiscal year.
Nadella said on a call with investors that demand for cloud and AI remained strong.
However, Microsoft is constantly tweaking its investments based on efficiency improvements in computing systems and what kind of services customers want, he said.
“We just want to make sure we are accounting for the latest and greatest information,” he said.
Microsoft said its relationship with ChatGPT creator OpenAI was evolving and that it would no longer be the exclusive provider of the key start-up’s colossal computing needs.
The company added that it returned US$9.7 billion to shareholders through dividends and share repurchases during the quarter.
“This was a strong, steady quarter from a company that’s matured into its AI moment,” Emarketer principal analyst Jeremy Goldman said.
Despite a few hiccups, “Microsoft’s ability to turn AI enthusiasm into real revenue ... sets it apart in a field crowded with promise, but short on payoff,” he said.
Additional reporting by AFP
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