Financial Association News on October 31 (Editor: Zhao Hao) After the US stock market closed on Wednesday (October 30), Microsoft, the leader of the "Big Seven" in the US stock market, announced the performance report for the first quarter of the 2025 fiscal year (third quarter of 2024).

Due to better-than-expected performance, Microsoft's stock price rose over 2.4% after hours, but the disappointing outlook for the second quarter, with slower growth in cloud revenue, declining profit margins, and increased expenses, led to a drop of over 5%. Microsoft fell nearly 3.6% now.

Specific data shows that Microsoft's quarterly revenue reached $65.6 billion, a 16% year-on-year increase, higher than the market's expected $64.51 billion; net income was $24.7 billion, up 11%; earnings per share were $3.30, up 10%, also stronger than the expected $3.10.

Microsoft's Chairman and CEO, Satya Nadella, wrote in a press release, "We are expanding our opportunities and winning new customers, helping them apply our artificial intelligence platform and tools to drive new growth and operational leverage."

Microsoft Executive Vice President and Chief Financial Officer Amy Hood stated: "The strong execution of our sales team and partners has delivered a solid start to our fiscal year."

Hood mentioned that quarterly revenue of "Microsoft Cloud" reached $38.9 billion, a 22% year-on-year growth, slightly above the analyst consensus of $38.11 billion.

The report states that revenue from intelligent cloud business was $24.1 billion, up 20%, slightly higher than the market expectation of $24.04 billion, with server products and cloud services revenue growing by 23%.

Azure and other cloud services revenue increased by 33%, surpassing the market expectation of 29.4%. Microsoft wrote in the presentation slides, "12 percentage points of this came from our artificial intelligence (AI) services." (This ratio was 11 percentage points in the previous quarter)

In Microsoft's other business segments, productivity and business processes business achieved revenue of $28.3 billion, a 12% year-on-year growth.

Among Microsoft's other business segments, Microsoft 365 commercial products and cloud services revenue grew by 13%; consumer products and cloud services revenue grew by 5%; Dynamics products and cloud services revenue grew by 14%; LinkedIn revenue grew by 10%.

Media analysts suggest that the performance indicates Microsoft's substantial investments in artificial intelligence are starting to pay off. Keybanc analyst Jackson Ader mentioned, "People are shifting from just talking about artificial intelligence, testing and piloting, to actually deploying it into production."

DA Davidson & Co. analyst Gil Luria said: "We were initially concerned that their investment in datacenter construction might drag down the profit margin. However, this situation has not yet occurred, as they are able to cut enough costs in other areas."

However, Microsoft executives stated in a conference call that revenue from the closely watched Azure cloud computing business is expected to grow by 31% to 32% in the second quarter (fourth quarter of this year).

Hood expects the profit margin of the commercial cloud to narrow, and reiterated that as the company expands its ai services, capital expenditures will increase.