Microsoft has historically refrained from revealing Azure’s quarterly revenue figures in dollar amounts, typically opting to share only growth percentages or vague descriptions of revenue milestones. However, on Wednesday, the company announced a record-breaking quarter, disclosing that Azure generated a substantial $33.2 billion in revenue for the period spanning July to September, reflecting a 48% increase compared to the same quarter last year. This revelation allows investors to more directly compare Azure’s performance with that of Amazon Web Services and Google Cloud, both of which report their cloud revenue in dollar amounts on a quarterly basis.
Alphabet, which also released its earnings on Wednesday, reported that Google Cloud achieved $30.7 billion in revenue for the same quarter, placing Azure slightly ahead. However, Google Cloud, which encompasses Google’s Workspace subscriptions, experienced a revenue increase that was approximately double that of Azure, growing at a rate roughly twice as fast, according to calculations by hinews.
Azure, which enables businesses to rent computing power for application hosting, Software as a Service (SaaS), and the development and execution of AI models, has now become Microsoft’s largest and fastest-growing product line, according to the company’s own metrics. It represented approximately 36% of Microsoft’s total quarterly revenue of $92.3 billion. Furthermore, Azure’s revenue exceeded analysts’ expectations by about $850 million, surpassing the anticipated $32.3 billion. The 48% growth rate of Azure also outperformed the 44% to 45% growth forecasted by Microsoft CFO Amy Hood during the company’s earnings call in July.
Azure is categorized within the Agents and Infra segment, one of two new business divisions that Microsoft introduced this quarter. Previously, the company reported its financials across three segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The newly formed Agents and Infra segment, which combines Azure with Microsoft 365’s cloud offerings, generated $76.8 billion, marking a 25% increase from the previous year.
Amazon is set to announce its earnings on Thursday, with analysts anticipating growth for its cloud division, Amazon Web Services. As the largest cloud service provider since its inception, it is widely believed that Microsoft is not poised to surpass it at this time. Nevertheless, with all major players now reporting actual dollar figures, the competition is intensifying.
