Microsoft has surpassed Wall Street estimates by posting fourth-quarter financial results showing a total three-month revenue of $64.73 billion.
However, despite stronger-than-expected overall revenue, the company's Azure cloud platform experienced revenue growth below what had been forecast, driving investor concern and reducing stock by around 7% in extended trading.
For the company on the whole, both revenue and operating income saw a 15% growth, with net income accounting for a healthy $22.0 billion.
Is Microsoft's growth slowing down?
Microsoft’s growth is largely attributed to its cloud computing segment, Intelligent Cloud, which generated $28.52 billion in revenue, or 44% of the company’s entire revenue, marking a solid 19% increase.
Despite very strong growth, Azure’s 29% revenue growth fell short of the anticipated 31% figure – the first time the business has fallen short of predictions since 2022.
Elsewhere in the business, Microsoft posted a 7% increase in Windows revenue, which could be good news for its flagship AI-enabled Windows 11 operating system, which has so far proven less popular than hoped. Windows 10 continues to account for around two-thirds of all Windows installs, with Windows 11 only accounting for around 30% of the market.
“As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era," Microsoft CEO Satya Nadella commented.
For the twelve months ending June 30, 2024, Microsoft generated $245.1 billion in revenue, an increase of 16% year over year.
Looking ahead, the company forecasts fiscal first-quarter revenue between $63.8 and $64.8 billion, below the $65.24 billion expected by analysts, which could put a dent in share prices. Microsoft has slipped back into second place in terms of market cap, just behind Apple, with a valuation of $3.143 trillion.
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