Highlights from Microsoft 2023 Q3 Earnings: Power Platform growth; Profiting from AI; New revenue guidance

Shares of Microsoft stock rose sharply following their 2023 Q3 earnings report, which beat analyst estimates on both revenue and earnings.

The strength of the company's financial performance reflects investor confidence in the face of shifting trends like slower cloud revenue growth and balancing quarterly performance with long term investments in areas like AI services and the integration of acquisitions like Nuance.

• In their earnings webcast, Microsoft CEO Satya Nadella and CFO Amy Hood began by noting areas of strength. Some highlights include:
• More than 15,000 Azure Arc customers, up over 150% year-over-year
• More than 36,000 organizations have used "existing AI-powered capabilities in Power Platform"
• Nearly 33 million monthly active users of Power Platform, up nearly 50% year-over-year
• More than 2,500 Azure OpenAI Service customers, up 10X quarter-over-quarter

In response to an analyst question, Nadella explained that the company will be expanding its monetization of Copilot services, using Github Copilot as a model. The company has recently broadened its plans for Copilot to stretch across productivity applications and business applications and related services like Viva Sales and Power Platform. Most of these capabilities are available only in preview, at no cost. The company will have to decide how to charge for capabilities like in-app generative AI in a way that both appeases customer concerns and delivers profitability. Nadella stated: