Microsoft reported US$52.9 billion in fiscal third-quarter revenue on 25 April, up 7% year-on-year. Azure and other cloud services grew 27%, or 31% at constant currency.
Photo: efes, 2015. Original photograph via Wikimedia Commons. CC0 1.0. Recompressed; responsive crops.
CFO Amy Hood’s commentary separates cloud profitability from AI expansion. Microsoft Cloud’s gross margin rose roughly two percentage points year-on-year to 72%; excluding the useful-life accounting change, it fell slightly.
Effective FY2023, the accounting change extended estimated server and network-equipment lifetimes from four to six years, reducing depreciation.
For the fourth quarter, Hood forecasts 26–27% Azure growth at constant currency, including roughly one percentage point from AI services. She also expects a substantial sequential capital-spending increase for Azure AI infrastructure.
The reported margin improvement doesn’t by itself show that AI is already improving cloud profitability.
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