Microsoft's shares jumped after the company said its fiscal third quarter net profit had surged nearly 9 per cent on an annual basis, driven by strong cloud business in different markets.
The company’s net profit jumped to $18.3 billion in the three months to the end of March, from the same period a year earlier, the company said in a statement on Tuesday.
Revenue during the January-March period jumped 7 per cent to $52.9 billion, exceeding analysts' expectations of $51.02 billion.
The company's stock, which has gained 15 per cent since the start of this year, surged 8.5 per cent in after-hours trading on Tuesday. The company’s share price was $275.42 at market close giving Microsoft a market value of $2.05 trillion.
Revenue in Microsoft’s intelligent cloud division, which includes Azure public cloud, increased 16 per cent annually to $22.1 billion. Sales from Azure and other cloud services, which Microsoft does not report in dollars, grew by about 27 per cent.
“The world’s most advanced AI [artificial intelligence] models are coming together with the world’s most universal user interface — natural language — to create a new era of computing,” said Satya Nadella, Microsoft’s chairman and chief executive.
“Across the Microsoft Cloud, we are the platform of choice to help customers get the most value out of their digital spend and innovate for this next generation of AI.”
Since 2016, Microsoft has committed to building Azure into an AI supercomputer for the world, serving as the foundation of its vision to democratise AI as a platform.
The company’s last quarter diluted earnings increased 10 per cent to $2.45 a share, compared to the $2.23 a share expected by analysts, Refinitiv reported.
Its operating income surged 10 per cent to $22.4 billion in the previous quarter compared to the prior year period.
“Focused execution by our sales teams and partners in this dynamic environment resulted in [increased] Microsoft cloud revenue,” said Amy Hood, executive vice president and chief financial officer of Microsoft.
The company's productivity and business processes division, which includes both its Microsoft Office business and revenue from LinkedIn, surged 11 per cent to $17.5 billion in the March quarter.
LinkedIn revenue increased almost 8 per cent annually. Microsoft did not give a dollar figure for its LinkedIn revenue and did not disclose the number of users.
Microsoft 365 Consumer — a bundle of various apps — subscribers increased to 65.4 million at the end of the last quarter, up 12 per cent on a yearly basis, the company said.
Sales in the personal computing division dipped 9 per cent to $13.3 billion in the quarter.
Search and news advertising revenue excluding traffic acquisition costs increased 10 per cent, while devices revenue decreased 30 per cent.
Xbox content and services revenue increased 3 per cent in the third quarter.
Microsoft also returned $9.7 billion to shareholders in the form of share repurchases and dividends in the third quarter of fiscal year 2023, a decrease of 21.7 per cent compared to the third quarter of fiscal year 2022.
The company spent almost $7 billion on research and development, about 13.2 per cent of its total sales in the quarter. This is 10.7 per cent more than what was spent on R&D in the same period in 2022.
Microsoft’s total cash, cash equivalents and short-term investments stood at more than $104.4 billion by the end of the March quarter.
In January, Microsoft announced it was laying off 10,000 of its 221,000 employees to adjust to changing macroeconomics and to cut overall costs, amid a wave of industry layoffs.
In the same month, Microsoft announced the third phase of its long-term partnership with ChatGPT-maker OpenAI through a new multiyear, multibillion-dollar investment. The agreement follows Microsoft’s previous investments in the company in 2019 and 2021.
Emergency
Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
More coverage from the Future Forum
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The%20Beekeeper
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EDavid%20Ayer%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3EJason%20Statham%2C%20Josh%20Hutcherson%2C%20Emmy%20Raver-Lampman%2C%20Minnie%20Driver%2C%20Jeremy%20Irons%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
