Microsoft (MSFT) reported fiscal fourth quarter results that beat analyst estimates on both the top and bottom line. The tech giant reported earnings of $2.69 per share, better than the $2.56 that was expected. Revenue was also topped estimates $56.19 billion versus the expected $55.49 billion. Yahoo Finance breaks down Microsoft's latest report.
Video Transcript
- Shares of Microsoft under pressure in after hours here, down now more than 2%. When you look at the numbers, a solid beat both on revenue as well as earnings per share. But it really is about the outlook here for the company and concerns about continued slowdown in investments.
So let's walk you through the numbers here. Revenue coming in at $56.19 billion. Earnings per share at $2.69. Some numbers we like to look at in terms of where things stand. Intelligent Cloud revenue at $23.99 billion. That's also a beat pretty close to where estimates were.
We're also seeing operating income coming in at $24.25 billion. CapEx at $8.9 billion. One thing that we've been watching. On the one hand, there's been an excitement around AI and Microsoft's investments there. There's also sort of where their core business has been and that has been in enterprise here.
When you look at revenue and more personal computing, that came in at $13.9 billion. It was down 4%. Windows OEM revenue decreased 12%. And that's something that we have heard in terms of companies increasingly sort of they pulling back some of their investments in the face of what is more of kind of a cloudy outlook on the macro front.
Now, the big question here going into the call is going to be, well, how are they going to be monetizing AI and what is that growth prospect look like? Satya Nadella in the release saying organizations are not only asking how but how fast they can apply this next generation of AI to address the biggest opportunities and challenges they face safely and responsibly.
He goes on to say, we're focused on leading the new AI platform shift. Is that going to be enough to really get investors excited beyond what has already been built into the stock here and the potential for additional growth coming from AI technology?
- No, it's a great point. And I think as we were talking about this earlier coming into the report, it's really going to be about how much-- on the call, they disclosed about the level of spending that they're comfortable continuing to put forward, whether that's investments in other entities like OpenAI and whether they add incremental investment on top of that considering the head start out of the gate that OpenAI has had in some of their research development and actually bringing a product to market that everybody and their grandmother is talking about. If they're at the-- if they're at the summer barbecue, everybody wants to know about ChatGPT.
And so at the end of the day for Microsoft now, where do you further that investment into some of your other tentacles that you have that round out this holistic MSFT umbrella here, whether that be AI within LinkedIn, whether that be AI within some of their advertising products within search engine as well? Investors want to hear the answers about when that's going to be monetized and when that trickles through to some of the margins too.
- Yeah, and we did kind of get a preview of that when Microsoft announced some of their pricing strategy last week, $30 a month in terms of use of their generative AI during with their co-pilot service on top of what companies are already paying.
- Yeah.
- So we're getting a glimpse of how enterprise customers are wanting to integrate that. It is about how quickly that growth will come and how quickly the revenue is going to come in.
- Yeah, spot on here.