*UKHotViewsExtra* Microsoft Cloud fuels growth as Copilot release imminent

Microsoft is off to a strong start in Q1, driven by continued strength in its Cloud business, with the pending release of its workplace Copilot solution just around the corner, and the closing of the acquisition of Activision Blizzard, both looking like strong tailwinds moving forwards.

Overall revenue for Q1 was $56.5bn, up 12% in constant currency, Operating income was $26.9bn up an impressive 24%, though the company has reduced total headcount, which is 7% lower than a year ago. Revenue for Productivity and Business Processes was $18.6bn, up 12%, driven largely by Office 365 commercial revenue which was up 17%, and Dynamics, up 21%, with Dynamics 365 up 26%. Growth continues to be driven by healthy renewal execution and strong E5 momentum.

Revenue in Intelligent Cloud was $24.3bn, up 19%, with strong growth for Azure up 28% yoy. Overall Microsoft Cloud revenue was up 23% yoy. While the trends from prior quarters continued, growth was ahead of expectations primarily driven by increased GPU capacity and better-than-expected GPU utilisation of its AI service.

Revenue in More Personal Computing was $13.7bn and increased 2%, with a 22% decline in Devices offset by Windows revenue up 5% and Xbox content and services up 12%. Microsoft completed the acquisition of Activision Blizzard on October 13th, 2023, which now provides a significant content portfolio for it to leverage. (See CMA clears Microsoft’s £54bn gaming acquisition).

TechMarketView subscribers, including UKHotViews Premium subscribers, can continue reading our analysis of Microsoft’s Q1 results, and a look ahead to Q2, in our UKHotViewsExtra article Microsoft Cloud fuels growth as Copilot release imminent.

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Posted by Simon Baxter at '09:47'