Microsoft Q3 revenue beats estimates on cloud, AI demand

Microsoft Corporation

Microsoft Corporation

MSFT

0.00


Overview

  • U.S. technology giant's fiscal Q3 revenue rose 18%, beating analyst expectations

  • Adjusted EPS for fiscal Q3 rose 21% year-over-year

  • Company cites strong demand for cloud and AI as key drivers of growth


Outlook

  • Microsoft will provide forward-looking guidance on its earnings conference call and webcast


Result Drivers

  • CLOUD GROWTH - Microsoft Cloud revenue rose 29% year-over-year, with Azure and other cloud services revenue up 40%

  • AI MOMENTUM - AI business annual revenue run rate surpassed $37 bln, up 123% year-over-year, per CEO Satya Nadella

  • PRODUCTIVITY AND BUSINESS PROCESSES - Revenue in Productivity and Business Processes rose 17%, driven by growth in Microsoft 365 and Dynamics 365


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$82.90 bln

$81.39 bln (35 Analysts)

Q3 EPS

$4.27

Q3 Net Income

$31.80 bln

Q3 Azure and other cloud services revenue growth

40%

Q3 Cloud Revenue

$54.50 bln

Q3 Intelligent Cloud Revenue

$34.70 bln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 55 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the software peer group is "buy"

  • Wall Street's median 12-month price target for Microsoft Corp is $576.86, about 34.4% above its April 28 closing price of $429.25

  • The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 27 three months ago


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