Microsoft shares are headed higher in late trading Thursday after the software giant posted better-than-expected March quarter results, including another quarter of strong performance by the company’s Azure cloud computing business. It’s getting a boost from growth in demand for AI workloads.
Microsoft shares were 5.6% higher in late trading.
For the quarter, Microsoft reported revenue of $61.9 billion, up 17% from the year-earlier quarter, and $1 billion above the Street consensus as tracked by FactSet at $60.9 billion. Profit was $2.94 a share, ahead of the Street at $2.82.
Revenue in the company’s Productivity and Business Processes segment, which includes Office and other software, was $19.6 billion, up 12%, and at the top of the company’s forecast range of $19.3 billion to $19.6 billion.
For its Intelligent Cloud unit, including Azure, revenue was $26.7 billion, up 21%, topping the company’s forecast range of $26 billion and $26.3 billion.
Azure growth was 31%, above the Street consensus forecast at 28%, accelerating from 30% growth one quarter earlier. The latest quarter Azure growth included seven percentage points of growth related to AI, up from six points one quarter earlier.
For More Personal Computing, which includes gaming, Windows and Surface hardware, Microsoft posted revenue of $15.6 billion, up 17%, nicely ahead of the guidance range of $14.7 billion to $15.1 billion.
The company said overall Microsoft Cloud revenue was $35.1 billion, up 23% from a year ago.
Commercial bookings in the quarter were up 29% from the year-ago period, a sign of continued business strength, up from 17% in the December quarter, and 11% in the year earlier period.
The company bought back $2.8 billion of stock in the quarter.
Capital expenditures in the quarter were $14 billion, “to support demand in our cloud and AI offerings,” Microsoft said.
Cash flow from operations was $31.9 billion, up 31%, “driven by strong cloud billings and collections.”
The company noted that search and news advertising revenue excluding traffic acquisition costs rose 12%.
