Microsoft earnings surge on cloud revenue growth
Microsoft reported better-than-expected quarterly results and told investors that capital spending for the year would hit $190 billion due to rising memory costs.
According to the statement, Microsoft’s revenue increased by 18 percent on an annual basis in the third quarter ending March 31.
The technology giant’s net income increased from $25.82 billion in the same quarter of the previous year to $31.78 billion. Adjusted earnings exclude a $14 million decrease in net income from Microsoft’s investments in OpenAI.
Microsoft’s cloud computing unit reported 40 percent revenue growth in the January-March quarter, matching consensus estimates.
Microsoft Cloud revenue totaled $54.5 billion, up 29 percent from the previous year.
Total revenue for Microsoft’s Productivity and Business Processes segment, which includes Office productivity software, LinkedIn and Dynamics business software, reached $35 billion.
Microsoft’s More Personal Computing unit, which includes the Windows operating system, Xbox, Surface devices and Bing search ads, contributed $13.19 billion in revenue, a one percent decline.
There was a two percent decline in sales of Windows licenses to device manufacturers and Microsoft’s own devices.
Regarding the guidance, Microsoft’s finance chief Amy Hood called for fiscal fourth-quarter revenue of between $86.7 billion and $87.8 billion.
Hood, who predicts that investment expenditures for 2026 will be 190 billion US dollars, said that he expects an impact of 25 billion US dollars from high component prices.
Microsoft predicts Azure cloud growth will be between 39 percent and 40 percent.
Microsoft’s headcount will decrease year over year in calendar year 2027.
“We continue to evolve the way we work to increase our speed and agility,” Hood said.
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