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@ ZeroHedge News (RSS Feed)
2025-04-30 20:18:09
Microsoft Surges After Top- & Bottom-Line Beat; AI/Cloud Growth Accelerates
Microsoft Surges After Top- & Bottom-Line Beat; AI/Cloud Growth Accelerates
On the heels of Microsoft's decision to walk away from discussions to lease new server farm space and slow construction on land it already owns, all eyes are on the giant tech company's fiscal third-quarter earnings tonight for any signs of slowing on data center spending plans when it reports Wednesday.
“We believe that the Azure results and guidance as well as Microsoft’s commentary on capex are going to be the keys to the quarter,” wrote Kirk Materne, an analyst at Evercore ISI.
Investors watch these expenses closely for a glimpse of long-term cloud and AI demand expectations from the world’s largest software maker.
So, what's the score?
Microsoft beat on the top line with Q3 revenues of $70.07 Billion (well above the $68.48 billion consensus) and the bottom line (EPS $3.46 vs $3.22 consensus)
Microsoft Cloud revenue $42.4 billion, estimate $42.22 billion
Intelligent Cloud revenue $26.8 billion, estimate $25.99 billion
Azure and other cloud services revenue Ex-FX +33%, estimate +31%
Productivity and Business Processes revenue $29.9 billion, estimate $29.65 billion
More Personal Computing revenue $13.4 billion, estimate $12.67 billion
https://cms.zerohedge.com/s3/files/inline-images/bfm871C.jpg?itok=B5X3Ksar
Cloud revenue surged more than expected with revenues of $42.4 billion (above the $42.22 billion consensus),
“We delivered a strong quarter with Microsoft Cloud revenue of $42.4 billion, up 20% (up 22% in constant currency) year-over-year driven by continued demand for our differentiated offerings,” said Amy Hood, executive vice president and chief financial officer of Microsoft.
Azure & Other Cloud revenue up 33% (better than the 31% consensus).
https://cms.zerohedge.com/s3/files/inline-images/bfmB9CA.jpg?itok=b7B1mI9s
...AI growth making up 16ppts of that 33% (exp 15.6ppts)...
https://cms.zerohedge.com/s3/files/inline-images/bfm70B2.jpg?itok=7pbiBtrz
“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth," said Satya Nadella, chairman and chief executive officer of Microsoft.
“From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.”
Operating income was also a solid beat: $32.00 billion, estimate $30.31 billion
But the much-watched CapEx picture was mixed:
Capital expenditure $16.75 billion vs. $10.95 billion y/y, estimate $16.28 billion
Capital expenditures including assets acquired under finance leases $21.4 billion, estimate $22.56 billion
As a result of all this, MSFT shares are soaring after hours...
https://cms.zerohedge.com/s3/files/inline-images/2025-04-30_13-13-07.jpg?itok=PSvxGLQ4
...and we can't help but wonder if someone 'knew' about this 'early' given the moves in the market in the last minutes before the bell.
https://cms.zerohedge.com/s3/files/inline-images/2025-04-30_13-25-24.jpg?itok=-9DXw99Z
All eyes now on the call for any signals of a reduction in CapEx (expected at $88 billion for the fiscal year ending in June and $100 billion for the following fiscal year).
https://cms.zerohedge.com/users/tyler-durden
Wed, 04/30/2025 - 16:18
https://www.zerohedge.com/markets/microsoft-surges-after-top-bottom-line-beat-aicloud-growth-accelerates