Microsoft’s all-in approach to AI appears to pay off as the tech giant posted strong financial results for the first quarter of its 2024 financial year. AI and cloud-fueled growth has seen Microsoft post a double-digit revenue increase during the first quarter of its 2024 financial year, despite the ongoing weakness with PC sales. For the quarter ending September 30, Microsoft generated net income of $22.3 billion, an increase of 27% year over year. It also reported a year-over-year 13% increase in overall revenue, to $56.5 billion. Ever since Microsoft-backed OpenAI made ChatGPT generally available late last year, Microsoft has gone all-in on its own AI strategy, with its flagship Copilot tool about to be rolled out across the company’s entire product portfolio. As a result of this strategy, revenue in Productivity and Business Processes was $18.6 billion, an increase of 13% year over year and a figure that is expected to continue growing after Copilot becomes generally available from November 1, CFO Amy Hood said on a call with analysts after the results were published. “With Copilots, we are making the age of AI real for people and businesses everywhere,” said CEO Satya Nadella on the same call. “We are rapidly infusing AI across every layer of the tech stack and for every role of business process to drive productivity gains for our customers.” Office Commercial products and cloud services revenue increased 15% year over year, driven by Office 365 Commercial revenue growth of 18%. Office Consumer products and cloud services revenue increased by 3%, while Dynamics products and cloud services revenue increased by 22%, which Microsoft attributed to the 28% revenue growth Dynamics 365 saw during this quarter. Elsewhere, revenue in Microsoft’s Intelligent Cloud segment increased by 19% to $24.3 billion, with Azure and other cloud services posting a 29% increase in revenue. In contrast, Google Cloud’s revenue grew a mere 22% during the same quarter, the company’s slowest growth in nearly three years. Microsoft has the “most comprehensive cloud footprint”, with more than 60 data center regions worldwide, Nadella told analysts, adding that the company also has its AI services deployed in more regions than any other cloud provider. Despite the two-year tumultuous regulatory battle Microsoft endured trying to complete its acquisition of gaming studio Activision Blizzard, Xbox content and services revenue increased by 13% year over year. Search and news advertising revenue also saw an increase, up 10%. However, not every segment saw double-digit growth during the quarter. Microsoft’s More Personal Computing segment saw a more modest year-over-year revenue increase, up 3% to $13.7 billion. Although Windows OEM and Windows Commercial products and cloud services grew by 4% and 8%, respectively, device revenue saw a year-on-year decline of 22%. Global PC shipments have declined 7.6% year over year, according to a recent report from IDC. “For our full financial year 2024, we remain committed to investing for the cloud and AI opportunity while also maintaining our disciplined focus on operating leverage,” Hood told analysts. “I am confident that as a team, we will continue to deliver healthy growth in the year ahead, driven by our leadership in commercial cloud and our commitment to lead the AI platform wave.” Related content news analysis Apple earnings: About that iPhone 'slump' in China Based on information from Thursday's earnings report, it seems that data pointing to an iPhone slump in China were over-baked. By Jonny Evans May 03, 2024 9 mins iMac iPhone Apple news Microsoft begins to phase out ‘classic’ Teams Microsoft is encouraging Teams customers to move to the new, faster version of the collaboration app; the older version will be switched off next year. By Matthew Finnegan May 03, 2024 3 mins Microsoft Teams Collaboration Software Productivity Software news analysis Apple confirms it will open up the iPad in Europe this fall The latest efforts to comply with Europe’s Digital Markets Act mean developers can offer to side load apps to both iPhones and iPads in the EU. Apple has also taken steps to improve what it offers to smaller and non-commercial developers in the By Jonny Evans May 02, 2024 6 mins iPad Apple Mobile Apps news Udacity offers laid-off US workers free access to its courses for 30 days Sign-ups will be available over the next 30 days By Lucas Mearian May 02, 2024 4 mins Technology Industry IT Jobs IT Skills Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe