In its fiscal Q3 2023 report, Microsoft CFO Amy Hood stressed that the company will continue to prioritize AI-related efforts.
Tomorrow, Microsoft Corporation (NASDAQ: MSFT) posted its fiscal Q3 2023 income report, which beat expectations on the top and bottom lines. Moreover, the latest outing from the multinational tech corporation also beat estimates for its quarterly revenue guidance.
For fiscal Q3 2023, Microsoft, whose shares climbed 7% in pre-market trading on Wednesday, reported revenue of about $52.9 billion. The amount compared favorably with the $51.02 billion analysts were expecting for the same period. Furthermore, Microsoft’s revenue for the third quarter of the fiscal year represents a 7% year-on-year (YoY) increase from the $49.36 billion expected in 2022.
Microsoft also reported fiscal third-quarter earnings per share (EPS) of $2.45, compared to the consensus estimate of $2.23. Earnings per share increased 10% (and 14% in constant currency) from the previous quarter.
Operating income came in at $22.4 billion, a 10% increase, while net income came in at $18.3 billion, a 9% climb.
Share profits from cloud-based and other technology-oriented services
Shares of Microsoft rose 8.3% during the after-market trading session with Technalysis Research analyst Bob O’Donnell.
Azure and other cloud services growth declined to 27% from 31% last quarter. However, this growth rate was still faster than expected, and Microsoft is relying on more technology-enabled growth to grow its earnings. According to the Washington-based tech giant, Artificial Intelligence (AI) will drive revenue growth.
Microsoft executives weigh in on AI prospects in fiscal 2023 third quarter report
Amy Hood, chief financial officer of Microsoft, touched on this technological development, saying:
“As with any significant platform change, it starts with innovation, and we are excited about the early feedback and demand signals from the AI capabilities we have announced to date. We will continue to invest in our cloud infrastructure, particularly AI-related spend, as we scale to increasing demand driven by customer transformation. And we expect the resulting revenue to grow over time.
Hood’s bullish on artificial intelligence is reflected in his guidance for the fiscal fourth quarter. During a conference call with analysts, the Microsoft CFO called for between $54.85 billion and $55.85 billion in revenue. The guidance’s average range of $55.35 billion suggests growth of 6.7%, which exceeded analysts’ expectations of $54.84 billion.
Chairman and Chief Executive Officer of Microsoft Satya Nadella The company also expressed optimism on AI prospects, saying:
“The world’s most advanced AI models are coming together with the world’s most universal user interface – natural language – to create a new era of computing.”
In addition, Nadella identified Microsoft Cloud as the platform of choice to help customers get optimal value from “their digital spend”. Furthermore, the Microsoft CEO said that the tech giant is ready to innovate for the next generation of artificial intelligence.
Microsoft-OpenAI Collaboration
In January, Microsoft said it has invested billions in ChatGPT maker OpenAI. The deal was the third phase of an ongoing investment partnership between the two platforms, which runs through 2019.
Microsoft clarified that it partnered with OpenAI to accelerate breakthroughs in artificial intelligence. Furthermore, the company said that the collaboration will commercialize advanced technologies for both platforms in the future.
At the time, Nadella also pointed out that Microsoft and OpenAI shared an ambition to “responsibly” advance cutting-edge AI research and democratization.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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