Microsoft Azure has reported a robust 30% growth in Q2’24, outpacing its performance in the previous 3 quarters. 💰 Commits backlog is also up. Highlighting this trend, CEO Satya Nadella shared that “we’re seeing larger and more strategic Azure deals with an increase in the number of billion-dollar-plus Azure commitments.”
🏆 Microsoft has not only emerged as the most valuable company, boasting a $3.04 trillion market cap, but it is also witnessing accelerated growth, largely driven by AI and cloud. These drivers have been pivotal in exceeding market expectations.
For this quarter, Microsoft's revenue reached $62 billion, marking an 18% year-over-year increase and accelerating from the 13% growth observed in the last quarter.
Specifically, Azure and other cloud services revenue surged by 30% this quarter. This is a significant achievement, given the scale of Azure, which, as Nadella previously reported, has an annual run rate exceeding $55 billion.
💎 Quarterly Commit Breakdown:
This quarter: $222 billion
Last quarter: 212 billion
Growth: +$10 billion (+5%)
Microsoft reported, “Revenue allocated to remaining performance obligations… that will be invoiced and recognized as revenue in future periods, was $229 billion as of December 31, 2023, with $222 billion related to the commercial portion of revenue…”
While Microsoft only discloses total commits for all its cloud services, a rough estimation suggests that half of the $222 billion in commits are related to Azure. This estimation aligns with Nadella’s statement from July: "Microsoft Cloud surpassing $110 billion in annual revenue… with Azure accounting for over 50% of the total for the first time." Consequently, we can infer Azure's cloud commits to be in excess of $110 billion.
📈 Looking ahead, Microsoft forecasts Azure's growth to align with the 28% growth observed in the December quarter, on a constant currency basis. This projection also surpasses Wall Street estimates.
The trajectory for cloud continues to shine, spearheading Microsoft's forward momentum.
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