Microsoft Corp (NASDAQ:MSFT) reported fiscal fourth quarter results that topped Wall Street expectations on Wednesday, driven by continued strength in its cloud and artificial intelligence businesses, with shares rising about 2% in after-hours trading.
For the quarter ended June 30, Microsoft reported revenue of $90 billion, up 18% from a year earlier and ahead of analysts' expectations of about $87.6 billion.
Non-GAAP diluted earnings per share came in at $4.74, exceeding consensus estimates of approximately $4.24. On a GAAP basis, diluted earnings per share was $4.81, up 32% year over year.
Operating income increased 18% to $40.6 billion. GAAP net income rose 31% to $35.8 billion, while non-GAAP net income increased 22% to $35.3 billion.
Microsoft said several one-time items boosted quarterly earnings relative to the guidance it issued in April, providing a benefit of $0.27 per diluted share. These included a $3.2 billion gain from its investment in Anthropic and lower-than-expected expenses related to its voluntary retirement program. Those benefits were partially offset by severance expenses and impairment charges within its Xbox business.
Excluding those discrete items, Microsoft said it exceeded its expectations for revenue, operating income and diluted earnings per share.
"We are advancing the frontier on the cost-to-outcome curve, ensuring every customer can turn tokens into business results," Microsoft CEO Satya Nadella said in a statement. "This year, Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats, reflecting the confidence customers are placing in us to power their AI transformation."
Microsoft CFO Amy Hood highlighted continued momentum in the company's cloud business. "We delivered a strong quarter to close out the fiscal year, highlighted by Microsoft Cloud revenue of $59.3 billion, up 27% year-over-year," Hood highlighted.
Chris Beauchamp, IG chief market analyst, noted that Microsoft "appears to be back on track."
"A solid beat on earnings and revenue was underpinned by a 27% jump in Cloud computing revenue, and the commercial backlog remains impressive," Beauchamp said. "The shares have made gains in recent days, and these numbers would appear to reinforce the positive momentum."
