Microsoft's revenue in the first quarter of the 2024 fiscal year was $56.5 billion, with a net profit of $22.3 billion, a year-on-year increase of 27%

On October 25th, Microsoft announced its financial results for the first quarter of the 2024 fiscal year as of September 30, 2023, after hours local time on Tuesday. According to the financial report, Microsoft's revenue for the quarter was $56

On October 25th, Microsoft announced its financial results for the first quarter of the 2024 fiscal year as of September 30, 2023, after hours local time on Tuesday. According to the financial report, Microsoft's revenue for the quarter was $56.5 billion, a year-on-year increase of 13%, while analysts expect it to be $54.5 billion; Net profit of 22.3 billion US dollars, a year-on-year increase of 27%; Earnings per share are $2.99, while analysts' average expectation is $2.65.

Microsoft's first quarter results exceeded analysts' expectations, and the company's stock price rose 5% in after hours trading on Tuesday.

By department, Microsoft's intelligent cloud division, including Azure Public Cloud, SQL Server, Windows Server, Visual Studio, Nuance, GitHub, and Enterprise Services, had a revenue of $24.26 billion in the first quarter, a year-on-year increase of 19%, higher than analysts' expectations of $23.49 billion.

Among them, revenue from Azure Public Cloud alone increased by 29% in the quarter, higher than analysts' expectations of 26%. Microsoft did not disclose Azure's revenue, but at a fixed exchange rate, Azure's revenue increased by 28% year-on-year, higher than the 27% in the previous quarter. Microsoft stated that approximately two percentage points of the expected increase in Azure revenue will come from generative artificial intelligence products, including access services provided by Microsoft to the GPT-4 language model developed by OpenAI.

Microsoft's productivity and business processes division, including Office productivity software, recruitment platforms LinkedIn, and Dynamics, had revenue of $18.59 billion in the first quarter, a 13% year-on-year increase, exceeding analysts' expectations of $18.19 billion.

Among them, the revenue of enterprise version Office products and cloud services increased by 15% year-on-year, while the revenue of consumer grade Office products and cloud services increased by 3% year-on-year. Especially the number of subscribed users for Microsoft 365 Consumer Edition has increased to 76.7 million.

The personal computing department, which includes Windows operating system licensing, hardware devices, gaming, and search advertising, had a revenue of $13.67 billion in the first quarter, a year-on-year increase of 3%, higher than analysts' expectations of $12.85 billion.

The Windows operating system licensing revenue for device manufacturers increased by 4% year-on-year, ending five consecutive quarters of year-on-year decline. The personal computer market has begun to stabilize, with technology industry research firm Gardner estimating that personal computer shipments decreased by only 9% in the third quarter of this year, compared to a 30% decline in the first quarter.

Microsoft's spending growth in research and development, sales, and marketing costs continues to slow down. Among them, operating expenses increased by 1.3% in the first fiscal quarter, the lowest growth rate since 2016.

Amy Hood, Executive Vice President and Chief Financial Officer of Microsoft, said, "The joint efforts of our sales team and partners have led to a strong start to this fiscal year. Microsoft's revenue in cloud services was $31.8 billion, an increase of 24% year-on-year

Microsoft Chairman and CEO Satya Nadella stated that Microsoft "is still helping customers use Microsoft cloud services to maximize the value of digital spending and leverage their operations

This quarter, Microsoft launched a new network security service, launched a brand new Surface personal computer, and announced that it will start selling the Microsoft 365Copilot artificial intelligence plugin to enterprises on November 1st.

Nadella said, "With Copilot, we are creating a true era of artificial intelligence for users and businesses around the world." "We are rapidly integrating artificial intelligence into every layer of the technology stack and injecting artificial intelligence into every role and business process, driving customer productivity

Earlier this month, Microsoft completed a $68.7 billion acquisition of video game publisher Activision Blizzard. Although the financial situation of Activision Blizzard was not included in Microsoft's first quarter financial report, it will to some extent affect the next quarter's earnings.

Wall Street is paying attention to how generative artificial intelligence services can benefit Microsoft, which gained an early leading advantage by investing in the star startup OpenAI in the field of artificial intelligence.

Jesse Cohen, senior analyst at Investing.com, said: "The results indicate that artificial intelligence products are stimulating sales and have contributed to Microsoft's revenue and profit growth

But many of Microsoft's artificial intelligence services have not yet been widely applied. Brett Iversen, Microsoft's vice president for investor relations, said that a significant portion of the revenue growth announced on Tuesday came from customers returning to Microsoft's cloud services.

Iverson admitted, "Regarding the role of artificial intelligence... either by opening up new collaborations, expanding existing collaborations, or allowing us to reconnect with customers, we may not have done much with artificial intelligence yet

Microsoft announced on Tuesday a first quarter earnings per share of $2.99, higher than analysts' estimate of $2.65.

There are still some relatively weak areas, "said Jeremy Goldman of Insider Intelligence, a research firm." For example, the growth rate of search advertising revenue is lower than most areas

Microsoft stated that its search and news advertising revenue, excluding traffic acquisition costs, increased by 10% year-on-year, but did not disclose the specific revenue of these businesses.

Microsoft is integrating artificial intelligence into its own products, such as the Microsoft 365 Copilot artificial intelligence plugin, which costs $30 per month for subscription. UBS, the investment bank, calls it the "most anticipated software release based on generative artificial intelligence". Although this tool will only be available to a few pilot customers before its official launch next month. But enterprises need to undergo extensive upgrades to Microsoft systems in order to use Copilot. Analysts say this may bring more business to Microsoft before the large-scale release of Copilot.

Investors are still paying attention to how much Microsoft is spending on large data centers that support artificial intelligence software. Microsoft stated on Tuesday that its capital expenditure for the first quarter was $11.2 billion, higher than the previous quarter's $10.7 billion, which is at least the largest expenditure since fiscal 2016.

Since the beginning of this year, Microsoft's stock price has risen by 38%, while the S&P 500 index has risen by about 11% during the same period. (Chen Chen)