Software
Microsoft FYQ4: One of the Strongest Earnings Reports in Multi-Decade History
Tonight, Microsoft proved why the AI Enterprise crown is rightfully theirs. Management came out swinging this evening on multiple fronts. First off, the acceleration in Azure and Other Services to 39% up from 35% last quarter was significantly higher than expected, with the Street calling for growth of 33.7%. To grow nearly 40% at this scale is impressive. Microsoft also revealed its Azure revenue number for the first time of $75 billion for FY2025 (although not entirely surprising as we were modeling for Azure to be hitting $80 billion very soon). From there, the CFO guided for 37% growth in Azure for next quarter – indicating continuing a high growth rate at scale will not be a problem in the near-term. However, if we look at Commercial RPO, it’s clear something big is going on. Commercial RPO has accelerated to $368 billion, up 37% and 35% on CC basis. We do not typically see such large growth rates on such a large RPO base. It’s almost inconceivable.
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