Microsoft's cloud hosting services have propelled its FY24 Q1 earnings to new heights with total revenue at $56.5 billion, a 13% increase.
Elsewhere, its Intelligent Cloud revenue increased 19% to $24.3 billion, up from the $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 are up 21%.
Azure and other Microsoft cloud services also performed well, seeing revenue growth of 29%.
Microsoft AI and Cloud boost
Productivity and Business Process revenue saw a 13% increase to $18.6 billion driven largely by Office Commercial and Consumer products, with 365 Commercial experiencing growth of 18%, and 365 Consumer growing to 76.7 million subscriptions.
Microsoft chairman and CEO Satya Nadella highlighted Microsoft's investment in AI, stating, "With copilots, we are making the age of AI real for people and businesses everywhere. We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.”
According to Amy Hood, executive vice president and chief financial officer, the strong start to Microsoft’s Cloud revenue can be attributed to “consistent execution by our sales teams and partners.”
The impact from the release of Microsoft 365 Copilot, a brand new AI assistant to boost productivity, is yet to be seen with pricing for the AI to be $30 per user a month. The product doesn’t release until November 1st, but its impact on Productivity and Business Process is one to watch for Q2.
In its outlook for Q2, Microsoft expects Intelligent Cloud revenue to grow to between $25.1 and $25.4 billion, with Azure and other cloud services to grow 26-27% in constant currency. Office 365 Commercial revenue is expected to reach around 16% in constant currency.
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