Microsoft Q4 Earnings Report 2023

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Microsoft Q4FY23: The Company reported a Robust financial quarter but the Stock Fell by 4% Primarily Due to Tepid Revenue Guidance

Microsoft for Q4FY23 reported revenue of $56.2 billion increased by 8% from the same period last year. For FY23, the company's revenue went up by 7% YoY, the lowest annual growth rate for the company since 2017. (Source: Microsoft)

On a segment basis, Revenue from Productivity and Business Processes stood at $18.3 billion, which increased by 10% YoY. Productivity and Business Processes include commercial office products, cloud services, and LinkedIn. Moreover, Revenue from the Intelligent Cloud segment of the company was $24. billion and increased by 15%. The Intelligent Cloud segment comprises the Azure public cloud, SQL Server, Windows Server, Visual Studio, Nuance, GitHub, and enterprise services. Azure cloud revenue growth slowed to 26% from 27% in the previous quarter and 40% the previous year. Furthermore, Revenue from More Personal Computing was at $13.9 billion, which decreased by 4% YoY. (Source: Microsoft)

Microsoft's Net income totaled $20.08 billion, up from $16.74 billion spiked by 20% YoY. The company's entire FY23 Net income stood at $72.4 billion up by 6% YoY. (Source: Microsoft).

The company has recently partnered with Meta Platforms to release the social network’s open-source large language model Llama 2, which is said to be free for commercial or developer use. (Source: The Guardian)

Since 2016 first time the company's research and development costs declined on a YoY basis.      Moreover in May this year, the company's CEO told the employees that the company won't lift salaries this year. Apart from that, He issued a memo for another round of job cuts separate from the round of layoffs affecting 10,000 workers cut off in January. (Source: CNBC)

During the concall, Amy Hood, Microsoft’s finance chief mention that the company expects revenue of $53.8 billion to $54.8 billion in the First fiscal quarter. Moreover, Microsoft’s Azure growth is expected to be in a range of 25% to 26% in constant currency in Q1, with 2% points deriving from AI services, Amy Hood said, compared with 1 point in the fiscal fourth quarter. (Source: CNBC).

Microsoft CEO Satya Nadella in the analyst call said the company remains focused on “leading the new AI platform shift,” although its push to add AI features to its existing products among them workplace software, cloud computing services, and its Bing search engine are not yet making an obvious mark on its financial results. (Source: CNBC).

The Stock fell by 4% in extended trading on July 25th. (Source: CNBC).

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