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A diverse portfolio of products including Outlook and Teams has made Microsoft (NASDAQ:MSFT) essential to businesses adopting flexible work models, helping it retain and attract customers at a time when a broader economic slowdown has sapped corporate spending.
Its Azure cloud-computing unit also benefited from companies seeking to digitize their operations, winning large deals as businesses lean on technology to cut costs.
Azure grew 35% in the three months ended Sept. 30, but it missed the 36.5% analyst target compiled by Visible Alpha due to a stronger dollar. Excluding foreign exchange factors, Azure was up 42%.
Microsoft’s broader Intelligent Cloud division posted a 20% rise in revenue to $20.33 billion, almost in line with estimates of $20.37 billion, according to Refinitiv.
“We continue to see healthy demand across our commercial businesses including another quarter of solid bookings,” said Chief Financial Officer Amy Hood.
Still, a slump in personal computer sales and the dollar surge hurt Microsoft’s revenue and showed that the software giant is not entirely immune to macroeconomic pressures.
Windows OEM revenue sank 15%, as PC sales have shrunk from highs hit during the pandemic with households and businesses tightening spending in the face of decades-high inflation.
Shares of the Redmond, Washington-based company fell 2.2% in trading after the bell.
The company reported revenue of $50.12 billion for the quarter, compared with $45.32 billion a year earlier. Analysts on average had expected $49.61 billion, according to Refinitiv IBES data.
Net income fell to $17.56 billion, or $2.35 per share, during the quarter ended Sept. 30, from $20.51 billion, or $2.71 per share, a year earlier.
