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Cloud and AI drive Microsoft Q3 earnings as net income goes up by 9%

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Microsoft Q3 earnings

Microsoft Q3 earnings report FY23 indicates a growth of 7% in revenue reaching $52.9 billion for the quarter ending March 31, 2023. Its net income reached $18.3 billion which is a growth of 9%.

Moreover, its operating income surged by 10% reaching $22.4 billion. The diluted earnings per share also experienced a notable increase, rising to $2.45 and marking a growth of 10%.

“The convergence of cutting-edge artificial intelligence (AI) models with the intuitive natural language interface is revolutionizing computing, and Microsoft is at the forefront of this transformation,” quoted Satya Nadella, Microsoft’s CEO.

Microsoft Cloud is providing customers with maximum value for their digital investments and driving the next wave of AI innovation and as a result, generated an impressive revenue of $28.5 billion, marking a remarkable YoY growth of 22% in a dynamic environment.

Intelligent Cloud segment generated a revenue of $22.1 billion, as per the Microsoft Q3 earning report, exhibiting a significant increase of 16%. In this segment, server products and cloud services revenue experienced a growth of 17% driven by the impressive 27% increase in Azure and other cloud services revenue.

Productivity and business processes segment revenue reach $17.5 billion, up by 11%

  • The Office Commercial products and cloud services’ revenue went up by 13% due to the 14% growth in Office 365 Commercial revenue.
  • Office Consumer products and cloud services revenue increased by 1%, while the number of Microsoft 365 Consumer subscribers rose to 65.4 million.
  • Dynamics products and cloud services revenue increased by 17% primarily due to the exceptional growth of 25% in Dynamics 365 revenue.

Personal computing segment posted revenue of $13.3 billion, down by 9%

  • Windows OEM revenue decreased by 28% and devices revenue dropped by 30%.
  • On the other hand, Windows Commercial products and cloud services revenue witnessed a rise of 14%, and Xbox content and services revenue increased by 3%.
  • Search and news advertising revenue, excluding traffic acquisition costs, experienced a growth of 10%, reveals the Microsoft Q3 earnings report.

Productivity improvements by Microsoft

Microsoft has been continuously enhancing productivity and efficiency for its users. The company has introduced new features and tools in its products, such as Microsoft Teams, Power Platform, and Dynamics 365, to help businesses and individuals streamline their work processes. Additionally, Microsoft has been investing in AI and machine learning technologies to bring new levels of automation and intelligence to its productivity suite.

  • Microsoft is integrating the AI-powered Bing search engine into its Windows software, making it easily accessible to users worldwide. This move is expected to push the boundaries of artificial intelligence and bring it closer to everyday life.
  • Microsoft is bringing the power of next-generation Artificial Intelligence (AI) to work by introducing the Microsoft 365 Copilot. The Copilot brings the power of large language models (LLMs) to the data in the Microsoft Graph and the Microsoft 365 apps, transforming words into the most powerful productivity tool.
  • The new AI-powered Microsoft Teams app provides improved speed, performance, and flexibility. It offers a streamlined user experience with faster launch times and easier access to meetings, along with support for cross-organizational collaboration and multi-account management.
  • Microsoft Edge has introduced Edge Workspaces, enabling users to collaborate while browsing the web. It has also become the first browser with an integrated AI image generator, the Image Creator, powered by OpenAI’s DALL.E models, which is accessible from the Microsoft Edge sidebar.

Microsoft announced in January 2023 that ChatGPT is coming soon to the Azure OpenAI Service, which is generally available. “This will help Microsoft to help customers apply the world’s most advanced AI models to their business imperatives”, said Satya Nadella.

Read next: Google intensifies AI race – combines Google Brain and DeepMind into Google DeepMind

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