Revenue there rose 10%, to $18.29 billion, beating Wall Street’s $18.06 billion forecast.Īll told, Microsoft delivered strong fourth-quarter results as it managed to keep growing the most important parts of its business, Constellation Research Inc. Microsoft’s other main segment is the Productivity and Business Processes unit that includes Office, LinkedIn and Dynamics 365, among other products. For the first quarter, Microsoft is forecasting the More Personal Computing segment to deliver $12.5 billion to $12.9 billion in revenue, lower than the $13.22 billion analyst estimate. The situation is unlikely to improve any time soon, and is one of the reasons for Microsoft’s soft guidance. Consequently, PC makers bought 12% fewer Windows licenses. recently reporting that sales of PCs declined about 17% during the quarter. The market for personal computers is in decline, with market watcher Gartner Inc. The damage there was the result of lower sales of Windows licenses to device makers. This has been going on for some time, and during the quarter, she said, “We saw a continuation of the optimization and new workload trends from the prior quarter.”Įlsewhere, Microsoft’s More Personal Computing segment, which includes sales from Windows, devices, gaming and search advertising, delivered $13.91 billion in revenue, down 4% from a year ago but just above the consensus estimate of $13.58 billion. In the conference call, Hood said many customers are looking to adjust their existing workloads to lower costs, prompted by fears over the economic situation. Nowadays though, customers are being much more cautious. During the boom times of the COVID-19 pandemic, the Azure cloud would consistently grow at rates of 50% or more. Chief Executive Satya Nadella (pictured) told analysts on the call that “Microsoft Cloud” generated more than $110 billion in annual revenue, with Azure responsible for more than half of that amount.Īzure’s revenue growth fell slightly short of the past quarter’s growth at Google Cloud, the cloud infrastructure unit of its competitor Google LLC, which reported growth of 28% earlier today.Īlthough the cloud business is still growing, it’s doing so at a much slower rate than before. Microsoft doesn’t break out its exact revenue for Azure, but it claimed that the business grew 26% during the quarter, beating the expectations of analysts who called for growth of 25%. The segment is made up of the Azure public cloud, plus Windows Server, SQL Server, GitHub, Nuance, Visual Studio and enterprise services. One of the bright spots in the quarter was Microsoft’s Intelligent Cloud business, which delivered revenue of $23.99 billion, up 15% from a year ago and above Wall Street’s consensus estimate of $23.79 billion. The company has seen revenue grow by less than 10% for three consecutive quarters now, the first time that has happened since 2017. Microsoft’s cautious guidance reflects how its growth has slowed considerably over the last year. Unfortunately, the middle of that range came in below Wall Street’s consensus estimate of $54.94 billion. Microsoft Chief Financial Officer Amy Hood said on a conference call that the company is looking at fiscal 2024 first-quarter revenue of between $53.8 billion and $54.8 billion, implying growth of about 8%. However, the company may struggle to repeat that success in the current quarter. The results came in ahead of analysts’ expectations, with Wall Street looking for earnings of $2.55 per share on sales of $55.47 billion. Earnings before certain costs such as stock compensation came to $2.69 per share, while revenue rose 8%, to $56.19 billion. The company reported net income of $20.1 billion for its fiscal 2023 fourth quarter, up 20% from a year earlier. Microsoft did at least beat expectations in the quarter just gone. fell more than 3% in the after-hours trading session today after the Windows software maker and cloud computing giant offered softer-than-expected guidance for the current quarter.
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