Microsoft hits record profits once again — but there's a rare miss for Azure cloud results

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Microsoft’s annual revenue is up 16% YOY

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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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Craig Hale
Craig Hale

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!