‘Each Azure area is now AI-first,’ mentioned Microsoft CEO Satya Nadella
Microsoft delivered income up 24% year-over-year and income of $76.4 billion for the quarter, up 18% from the identical time final 12 months, pushed on the power of demand for cloud and AI infrastructure and providers.
Microsoft Cloud revenues for the quarter have been stronger than anticipated at $46.7 billion, up 27%.
“Cloud and AI is the driving drive of enterprise transformation throughout each business and sector,” mentioned Satya Nadella, chairman and CEO of Microsoft.
On the quarterly name with buyers, he added: “The speed of innovation and the velocity of diffusion is not like something we have now seen. To that finish, we’re constructing essentially the most complete suite of AI merchandise and tech stack at large scale.”
When it comes to infrastructure-specific remarks from the decision, Nadella mentioned that Microsoft has opened new information facilities on six continents and stood up greater than 2 gigawatts of latest capability up to now 12 months. The corporate now has greater than 400 DCs throughout 70 areas. “We proceed to guide the AI infrastructure wave and took share each quarter this 12 months,” he mentioned.
Nadella additionally mentioned that Microsoft is “[scaling] our personal information heart capability quicker than some other competitor” and that the infrastructure it’s constructing out is targeted on help of AI workloads.
“Each Azure area is now AI-first,” mentioned Nadella.
Microsoft spent $24.2 billion in capital expenditures in the course of the quarter. CFO Amy Hood defined that greater than half of that determine was spending on “long-lived belongings that may help monetization over the subsequent 15 years and past,” with the remaining capex going to servers, CPUs and GPUs. “Whereas we introduced extra information heart capability on-line this quarter, demand stays larger than provide,” Hood mentioned.
She additionally mentioned that Microsoft would “proceed to speculate towards the expansive alternative forward throughout each capital expenditures and working bills, given our management place in business cloud, robust demand indicators for our cloud and AI choices, and vital contracted backlog.” However the firm nonetheless expects development in capex to reasonable in comparison with this previous fiscal 12 months.
The corporate’s clients are quickly ramping their use of Microsoft’s AI instruments as nicely. Nadella famous that Microsoft launched Azure AI Foundry in the course of the previous 12 months to assist clients design, customise and handle AI purposes and brokers at scale.
“Prospects more and more need to use a number of AI fashions to fulfill their particular efficiency, price and use case necessities,” he mentioned. Foundry, he added, permits clients to provision inferencing throughput as soon as after which “apply it throughout extra fashions than some other hyperscaler.” He added later within the name that AI is driving a “elementary change” in enterprise purposes as clients shift to agentic apps.
In the meantime, Microsoft’s Copilot apps have greater than 100 million lively business and shopper customers — and rising. Nadella gave plenty of particular examples: Barclays began with an preliminary deployment of Microsoft 365 Copilot with 15,000 workers and can now roll it out to 100,000 workers globally. UBS began with 55,000 workers and is increasing to all workers. Greater than 25,000 Microsoft 365 Copilot “seats” have been bought this previous quarter by Adobe, KPMG, Pfizer and Wells Fargo, in accordance with Nadella.
For the total fiscal 12 months, Microsoft’s revenues have been $281.7 billion, up 15%, whereas its internet earnings grew 16% to hit $101.8 billion.
