Microsoft’s cloud hosting services have fueled its growth Financial year 24 Q1 Profits soar to new heights with total revenue of $56.5 billion, up 13%.
Elsewhere, Intelligent Cloud revenues rose 19% to $24.3 billion, up from $20.3 billion in the same quarter FY23, helped by a significant boost from server products and cloud services such as SQL and Windows Server, which rose 21%.
Azure and other Microsoft cloud services also performed well, with revenue growth of 29%.
Microsoft AI and Cloud Boost
Productivity and business processes revenue increased 13% to $18.6 billion, largely driven by Office Commercial and Consumer products, with 365 Commercial growing 18% and 365 Consumer growing to 76.7 million subscriptions.
Microsoft Chairman and CEO Satya Nadella highlighted Microsoft’s investments in AI, saying: “With copilots, we are making the age of AI a reality for people and businesses everywhere. We are rapidly introducing AI at every layer of the technology stack and for every role and every business. process to increase productivity gains for our customers.”
According to Amy Hood, Executive Vice President and Chief Financial Officer, the strong start to Microsoft’s Cloud revenues can be attributed to “consistent execution by our sales teams and partners.”
The impact of the release of Microsoft 365 Copilot, a brand new AI assistant to boost productivity, remains to be seen, as the price for the AI is $30 per user per month. The product won’t be released until November 1, but its impact on productivity and business processes is one to keep an eye on in the second quarter.
In its second quarter guidance, Microsoft expects Intelligent Cloud revenue to grow to between $25.1 billion and $25.4 billion, with Azure and other cloud services growing 26-27% at constant exchange rates. Office 365 Commercial revenue is expected to be approximately 16% at constant exchange rates.