- Overall Microsoft’s revenue is up, with AI tools pushing it forward
- Annual revenue run rate for its AI business is up 175% YoY
- Redmond opened two new data center regions last quarter
Microsoft revenue climbed a very healthy 12% year-over-year in the final three months of 2024, bringing the total quarterly figure to $69.6 billion and surpassing previous analyst expectations of $68.8 billion.
In the announcement, CEO Satya Nadella noted that its AI business’s annual revenue run rate now stands at $13 billion, up 175% year-over-year.
“We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead,” said Nadella.
Microsoft revenue propped up by AI
CFO Amy Hood confirmed that Microsoft Cloud revenue for the most recent quarter rose 21% year-over-year to $40.9 billion. Key to its success has been the growing demand for AI tools and data centers.
Among the AI highlights of its fiscal second quarter are Copilot in Excel with Python, the launch of Microsoft Places, LinkedIn upgrades, and two new data center region launches – New Zealand North and Taiwan North.
Speaking on the earnings call, Nadella added: “We have more than doubled our overall data center capacity in the last three years.”
Microsoft 365 Consumer cloud revenue grew by 8%, with its Commercial counterpart seeing a 16% growth, with businesses looking to invest in connected services powered by artificial intelligence.
The substantial double-digit growth is largely responsible for Microsoft’s recent financial success, but other areas of the business also saw minor upticks. Its Windows OEM and Devices revenue increased by 4% while Xbox content and services revenue increased by 2%, indicative of slow but steady consumer interest.
However, while the deprecation of Windows 10 is set to see consumer spending rise when it comes to hardware and software updates, some personal customers have been left with a bitter taste in their mouths after Microsoft 365 subscriptions became more expensive this month. Some Australian customers are seeing price hikes of up to 46%.
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