Microsoft's annual cloud revenue hits $75B, profit beats expectations

Core Insights - Microsoft's annual revenue for its Azure cloud computing platform has exceeded $75 billion, reflecting a 34% increase from the previous year [3][4] - The company's fiscal fourth-quarter profit reached $34.3 billion, or $3.65 per share, surpassing analyst expectations of $3.37 per share [5][6] - Microsoft reported total revenue of $76.4 billion for the April-June period, an 18% increase year-over-year, exceeding analyst forecasts of $73.86 billion [6] Company Strategy - The Azure cloud business is central to Microsoft's strategy to pivot towards artificial intelligence, with the company aiming to sell AI tools to large business clients [3][6] - CEO Satya Nadella emphasized that Microsoft is scaling its data center capacity faster than competitors, with over 400 facilities across six continents [5][9] - Despite the increase in profits, Microsoft announced layoffs of approximately 15,000 workers, which the CEO described as an opportunity to reimagine the company's mission in the AI era [7][8] Competitive Landscape - Microsoft still trails behind Amazon Web Services, which reported $107.6 billion in revenue for its fiscal year ending in December [7] - The company is facing significant capital expenditures, with CFO Amy Hood projecting $30 billion for the July-September quarter, as it invests in data centers and AI technology [10] Economic Environment - Microsoft has not disclosed the impact of U.S. tariffs on its revenue, but it acknowledges tariffs as a risk in its annual report [10] - The company highlighted that geopolitical instabilities and changing U.S. administration priorities contribute to an unpredictable trade landscape, potentially affecting supply chain cost competitiveness [11]