Microsoft reports slowing Azure cloud revenue growth

Microsoft shares slipped 1% successful extended trading connected Tuesday aft the bundle shaper issued fiscal 4th fourth earnings.

Here's however the institution did:

Revenue roseate 8% twelvemonth implicit twelvemonth successful the quarter, which ended connected June 30, according to a statement. Net income totaled $20.08 billion, compared with $16.740 cardinal successful the year-ago quarter.

Microsoft's Intelligent Cloud conception contributed $23.99 cardinal successful revenue, up 15% and supra the $23.79 cardinal statement of analysts surveyed by StreetAccount. The portion comprises the Azure nationalist cloud, SQL Server, Windows Server, Visual Studio, Nuance, GitHub and endeavor services.

Azure gross grew 26% during the quarter, compared with 27% maturation successful the erstwhile quarter. Analysts polled by CNBC and by StreetAccount had expected 25% maturation from Azure, which competes with Amazon Web Services and Google Cloud Platform. Microsoft doesn't study Azure gross successful dollars. Google genitor Alphabet said Tuesday that gross from its unreality products, which includes Google Workspace productivity apps successful summation to Google Cloud Platform, accrued by 28%.

Microsoft's Productivity and Business Processes conception that contains Office productivity software, LinkedIn and Dynamics delivered $18.29 cardinal successful revenue, up 10% and much than the StreetAccount statement of $18.06 billion.

The company's More Personal Computing business, which contains the Windows operating system, devices, gaming and hunt advertising, posted $13.91 cardinal successful revenue. That fig indicates a diminution of astir 4%, yet it inactive topped the $13.58 cardinal StreetAccount consensus.

Sales of Windows licenses to instrumentality makers decreased by 12%. Consumers and companies rushed to bargain PCs aft the onset of Covid, making comparisons hard for the past year.

Investors are anxious for solution successful Microsoft's statement to bargain Activision Blizzard for astir $69 billion, which was agreed upon successful January 2022. Earlier this month, an appeals tribunal denied the Federal Trade Commission's question to halt the transaction. Activision shares person climbed past $92.50, adjacent to the $95 that Microsoft agreed to pay, reflecting optimism that the woody is connected way to close.

Notwithstanding the after-hours move, Microsoft shares person gained 44% twelvemonth to date, portion the S&P 500 is up 19%.

The institution said its operating expenses roseate astir 2% successful the quarter, partially due to the fact that of a complaint to wage a good from Ireland's Data Protection Commission aft the authorization looked astatine whether the company's LinkedIn portion violated the European Union's General Data Protection Regulation.

Microsoft CEO Satya Nadella told employees successful May that the institution won't assistance salaries this year.

During the quarter, Microsoft built connected its broad alliance with OpenAI to capitalize connected caller involvement successful artificial intelligence, pursuing the November motorboat of the startup's ChatGPT chatbot. Microsoft introduced a chatbot powered partially by OpenAI connection models to assistance workers marque consciousness of their employers' data, and it told developers they'll beryllium capable to physique plugins that radical tin entree done ChatGPT, the Bing hunt engine's chatbot, and different tools.

Excluding the after-hours move, Microsoft shares person gained 46% twelvemonth to date, portion the S&P 500 is up 19%.

Executives volition sermon the results with analysts and contented guidance connected a league telephone starting astatine 5:30 p.m. ET.

This is breaking news. Please cheque backmost for updates.

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