Microsoft Delivers Robust Earnings with Strong Growth in Cloud and AI Services
The highlight of the quarter was Azure, Microsoft's flagship cloud platform, which recorded a 39% year-on-year increase in revenue in constant currency, surpassing analyst expectations of 34%. In a notable first, Microsoft also disclosed Azure's annual revenue, which has exceeded USD $75 billion, underscoring the platform's pivotal role in the company's enterprise growth strategy.
Total revenue for the quarter reached USD $76.4 billion, an 18% increase year-over-year, while earnings per share (EPS) surged to USD $3.65, comfortably beating Wall Street estimates. The strong performance was broad-based, with growth across cloud, productivity, and personal computing segments.
Despite a record capital expenditure (Capex) of USD $24.2 billion—driven by continued investments in AI and data center infrastructure—Microsoft's operating income climbed by 23% to USD $34.3 billion. Margins continued to expand, highlighting the company's operational efficiency even amid heavy investment. For me, the key investor takeaway is that Microsoft is spending big to stay ahead in AI but is still growing profit faster than revenue, a true sign of a quality business.
Josh Gilbert, Market Analyst at eToro, said: "Microsoft's latest results clearly demonstrate its dominance in cloud and AI sectors. The accelerated Azure growth and disciplined capital spending showcase a company perfectly positioned to lead the next wave of technology innovation."
We are witnessing a once-in-a-generation technology transformation, and Microsoft is leading the way with accelerating AI monetisation and unmatched cloud momentum."
With Azure growth outpacing expectations and AI integration gaining speed across its platforms, Microsoft is demonstrating a rare ability to scale innovation while driving profitability, cementing its position at the forefront of the global tech shift.
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