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Microsoft Earnings: Shares Up Amid OpenAI Investment, Layoffs

Last Updated: January 11, 2024
With Microsoft shares up 4%, Boardroom breaks down the Microsoft earnings report, including where the tech company delivered and fell short of expectations.

Microsoft shares are up 4% per its Q2 earnings report, released on Tuesday. The company showed a very slight beat in earnings per share amid a tumultuous time at the legacy tech leader.

Here’s a quick breakdown of what Microsoft announced:

  • Adjusted EPS came out to $2.32 against $2.30 expected, with revenues of $52.7 billion slightly lower than the $52.9 billion expectation, but up 2% year-over-year.
  • Profits fell 12% year-over-year to $16.4 billion.
  • While its Intelligent Cloud business grew 18% in the quarter, including 31% with its Azure cloud computing service, that growth is slower year-over-year. IC and Azure grew 26% and 46% respectively.
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Other segments of the business were also a mixed bag in earnings, with productivity and business process generating $17 billion, versus $16.8 billion expected. Personal computing’s $14.2 billion in revenue missed its $14.7 billion expectations.

The earnings report comes a week after Microsoft announced it would lay off 10,000 workers. It was also a day after the company announced a multi-year, multi-billion dollar investment in ChatGPT creator OpenAI. Microsoft said it’s building on investments made in the company in 2019 and 2021, including in the development of specialized supercomputing systems to improve OpenAI’s research, powering OpenAI workloads via Azure as its exclusive cloud provider, and deploying OpenAI models across consumer and enterprise products.

Additionally, Microsoft’s mammoth $69 billion purchase of embattled video game maker Activision Blizzard is still on hold amid complaints and antitrust investigations from the Federal Trade Commission, the U.K’.s Competition and Markets Authority, and the E.U.’s European Commission. Earlier this week, a U.S. district court in California denied Microsoft’s request to pause an Activision Blizzard lawsuit filed by gamers in December who argued that the Microsoft’s merger with Activision Blizzard would harm competition within the gaming industry.

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About The Author
Shlomo Sprung
Shlomo Sprung
Shlomo Sprung is a Senior Staff Writer at Boardroom. He has more than a decade of experience in journalism, with past work appearing in Forbes, MLB.com, Awful Announcing, and The Sporting News. He graduated from the Columbia University Graduate School of Journalism in 2011, and his Twitter and Spotify addictions are well under control. Just ask him.