Microsoft who are desperate to get consumers to use their Edge Browser and have started spruiking the inclusion of new Ai capabilities as a rerson to switch from the popular Google Chrome, have reported an 18% jump in revenues as the business goes after the emerging Ai market.
The business has posted its strongest revenue growth since 2022, with subscriptions from cloud computing and their Azure services growing by 30%.
This is despite massive redesigns of key software such as Outlook and PowerPoint and Microsoft 365 services, which has seen key features that were working perfectly redesigned and moved to new locations which are not as productive as previous designs.
Revenue in the second quarter, which ended Dec. 31, rose 18% to $62 billion, while profit was $2.93 a share, the company said in a statement Tuesday. Analysts polled by Bloomberg on average estimated per-share earnings of $2.78 on sales of $61.1 billion.
Azure cloud-services sales gained 30%, compared with 29% growth in the previous quarter. That exceeded the 28% growth analysts projected. In a call with analysts, the company said growth in the Azure division would “remain stable” during the current quarter.
Analysts are tipping that Chief Executive Officer Satya Nadella will turn Microsoft into an artificial intelligence powerhouse by partnering with startup OpenAI with Microsoft 365 users being bombarded with version 4.0 of Open AI inside Edge as a reason to dump Google that has over 85% share.
Commercial cloud product revenue rose 24% to $33.7 billion with the business releasing a corporate version of its Microsoft 365 Copilot — an AI assistant for Office programs like Outlook, Word, PowerPoint, and Teams — to business customers.
They have also taken to charging smaller firms $30 for a consumer version.
The new tools cost companies an extra $30 a month on top of their existing Office 365 subscription.
Microsoft’s Office cloud service for business users also topped 400 million paid customers in the quarter, Hood said.
Personal Computing sales rose to $16.9 billion, slightly topping the average analyst projection.
Global personal computer sales rose 0.3% in the quarter, according to market research firm Gartner.
Xbox content and services revenue jumped 61%.
This is the first quarterly result that included Activision Blizzard which Microsoft acquired in October to bolster the Xbox business.
