Whatever the future of AI, the current situation remains very good for Microsoft. The tech giant announced a new record quarterly revenue Wednesday: $92.3 billion, an increase of 19% from last year’s quarter.
Microsoft has now posted record revenues for 10 consecutive quarters.
It is also a profitable income. Microsoft reported that its net income rose to $36.6 billion, an increase of 32% on a GAAP basis, compared to last year’s quarter.
The record revenue was largely driven by the strength of Microsoft Cloud, which hit $63.9 billion in revenue this quarter, a 30% increase over last year’s quarter, Microsoft said.
Microsoft has reorganized its business reporting into two basic segments: 1) Agents and Infrastructure and 2) Devices and Consumers. On the other hand, consumer device and product revenue was $15.5 billion, down 3%, with OEM and Windows device revenue falling 22% from the year-ago quarter.
To be sure, not all of Microsoft’s healthy cloud revenue can be attributed to AI. Microsoft 365 was worth almost $28 billion. But it was Azure that brought in the most, with $33.2 billion. And again, not all of this is necessarily related to AI. Businesses run all kinds of traditional SaaS software and applications on Azure.
Still, a good chunk of revenue came from AI, as Microsoft also reported $10 billion in revenue from OpenAI. Despite expanding to AWS, Oracle and others, OpenAI still runs many of its services on Microsoft’s cloud. (Anthropic also runs on Azure.) Microsoft also said its “remaining business performance obligation increased 73% to $677 billion.” This represents future revenue committed under existing AI lab contracts.
But, like all major cloud providers, Microsoft is also spending a lot of money preparing to meet these commitments. Capital spending exceeded $45.2 billion, another all-time quarterly record.
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