Microsoft 2024 Q2: Earnings outperform on cloud revenue growth

Microsoft reported Q2 2024 earnings per share of $2.93 on revenue of $62.0 billion, exceeding analyst estimates.

“Strong execution by our sales teams and partners drove Microsoft Cloud revenue to $33.7 billion, up 24% (up 22% in constant currency) year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

Operating income was $27.0 billion and increased 33%.

Revenue in Intelligent Cloud was $25.9 billion and increased 20%, with Azure and other cloud service revenue growing 30%.

Dynamics products and cloud services revenue increased 21% with Dynamics 365 revenue growth of 27%. Last quarter this segment grew 22% with 28% D365 revenue growth.

Office Commercial products and cloud services revenue increased 15% (up 13% in constant currency) driven by Office 365 Commercial revenue growth of 17%

The larger Productivity and Business Processes segment generated $19.2 billion, up 13% overall. Office 365 Commercial revenue grew 15%.

"We’ve moved from talking about AI to applying AI at scale," said Satya Nadella, chairman and chief executive officer of Microsoft. "By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.”

In the earnings call with analysts, Nadella revealed a few additional metrics including: 

• Microsoft has 53,000 Azure AI customers. Over one-third are new to Azure over the past 12 months.
• More than 230,000 organizations have used AI capabilities in Power Platform, up over 80% quarter-over-quarter.
• Microsoft has over 1.3 million paid GitHub Copilot subscribers, up 30% quarter-over-quarter.
• More than 50,000 organizations use GitHub Copilot Business.
• Copilot for Sales has been used at 30,000 organizations.

Microsoft outperformed in Q1 2024 as well. A year ago, the company had seen earnings dip as revenue growth slowed.