‘Each Azure area is now AI-first,’ stated 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 yr, pushed on the power of demand for cloud and AI infrastructure and companies.
Microsoft Cloud revenues for the quarter had been stronger than anticipated at $46.7 billion, up 27%.
“Cloud and AI is the driving power of enterprise transformation throughout each business and sector,” stated Satya Nadella, chairman and CEO of Microsoft.
On the quarterly name with buyers, he added: “The speed of innovation and the pace of diffusion is not like something now we have seen. To that finish, we’re constructing probably the most complete suite of AI merchandise and tech stack at huge scale.”
By way of infrastructure-specific remarks from the decision, Nadella stated that Microsoft has opened new information facilities on six continents and stood up greater than 2 gigawatts of recent capability prior to now 12 months. The corporate now has greater than 400 DCs throughout 70 areas. “We proceed to steer the AI infrastructure wave and took share each quarter this yr,” he stated.
Nadella additionally stated that Microsoft is “[scaling] our personal information heart capability sooner than another competitor” and that the infrastructure it’s constructing out is targeted on assist of AI workloads.
“Each Azure area is now AI-first,” stated Nadella.
Microsoft spent $24.2 billion in capital expenditures throughout the quarter. CFO Amy Hood defined that greater than half of that determine was spending on “long-lived belongings that can assist 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 stated.
She additionally stated that Microsoft would “proceed to take a position in opposition to the expansive alternative forward throughout each capital expenditures and working bills, given our management place in industrial cloud, sturdy demand indicators for our cloud and AI choices, and important contracted backlog.” However the firm nonetheless expects development in capex to reasonable in comparison with this previous fiscal yr.
The corporate’s clients are quickly ramping their use of Microsoft’s AI instruments as properly. Nadella famous that Microsoft launched Azure AI Foundry throughout the previous yr to assist clients design, customise and handle AI functions and brokers at scale.
“Prospects more and more wish to use a number of AI fashions to fulfill their particular efficiency, price and use case necessities,” he stated. Foundry, he added, allows clients to provision inferencing throughput as soon as after which “apply it throughout extra fashions than another hyperscaler.” He added later within the name that AI is driving a “elementary change” in enterprise functions as clients shift to agentic apps.
In the meantime, Microsoft’s Copilot apps have greater than 100 million lively industrial and client 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” had been bought this previous quarter by Adobe, KPMG, Pfizer and Wells Fargo, in keeping with Nadella.
For the total fiscal yr, Microsoft’s revenues had been $281.7 billion, up 15%, whereas its internet earnings grew 16% to hit $101.8 billion.