Microsoft mentioned Wednesday that annual income for its flagship Azure cloud computing platform has surpassed $75 billion, up 34% from a yr earlier.
The Azure cloud enterprise is a centerpiece of Microsoft’s efforts to shift its focus to synthetic intelligence, however till Wednesday the corporate hadn’t disclosed how a lot cash it makes.
The revelation got here within the software program big’s end-of-year earnings report, one which additionally confirmed a 24% spike within the firm’s quarterly revenue that beat Wall Avenue expectations and happy traders cautious about Microsoft’s ongoing development of pricey new knowledge facilities wanted to satisfy cloud computing and AI demand.
“We proceed to scale our personal knowledge middle capability quicker than some other competitor,” CEO Satya Nadella mentioned on an investor name, boasting that the corporate now has greater than 400 of the sprawling services throughout six continents.
Microsoft’s fiscal fourth-quarter revenue was $34.3 billion, or $3.65 per share, beating analyst expectations for $3.37 per share.
It posted income of $76.4 billion within the April-June interval, up 18% from final yr. Analysts polled by FactSet Analysis had been searching for income of $73.86 billion.
Microsoft launched Azure greater than a decade in the past, however the service has more and more grow to be intertwined with its AI ambitions, as the corporate appears to promote its AI chatbot and different instruments to huge enterprise clients which are additionally reliant on its core on-line companies.
It nonetheless trails behind its lead competitor, Amazon Internet Companies, which reported $107.6 billion in income for its fiscal yr that led to December.
Constructing the infrastructure to energy cloud and AI expertise is dear, and Microsoft has appeared for financial savings elsewhere. It introduced layoffs of about 15,000 employees this yr at the same time as its earnings have soared.
Nadella informed staff final week the layoffs have been “weighing closely” on him but additionally positioned them as a chance to reimagine the corporate’s mission for an AI period.
Nonetheless, the general workforce numbers haven’t modified. The corporate mentioned it employed 228,000 full-time staff as of June 30, the very same quantity it reported a yr in the past, although barely extra of them at the moment are U.S.-based and fewer of them are in product assist roles or consulting companies.
Guarantees of a leaner method have been welcomed on Wall Avenue, particularly as Microsoft and different tech giants are attempting to justify enormous quantities of capital spending to pay for the information facilities, chips and different elements required to energy AI expertise.
Google mentioned after releasing its earnings final week it might increase its finances for capital expenditures by an extra $10 billion to $85 billion. Microsoft’s chief monetary officer, Amy Hood, mentioned she expects capital spending for the July-September quarter to be $30 billion.
Microsoft didn’t disclose Wednesday to what extent sweeping U.S. tariffs are affecting its income, however its annual report lists tariffs amongst a lot of dangers the corporate faces.
“Elevated geopolitical instabilities and altering U.S. administration priorities create an unpredictable commerce panorama,” the corporate mentioned. It additionally mentioned the “volatility of U.S. tariffs has triggered financial uncertainty and will influence cloud and gadgets provide chain value competitiveness.”
