Transcript of the Q1 2024 earnings call for Microsoft (MSFT)

 Transcript of the Q1 2024 earnings call for Microsoft (MSFT)

 

Call to discuss MSFT earnings for the quarter ending September 30, 2023.
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MSFT (MSFT 0.37%) Microsoft

Welcome to the conference call for the first quarter of Microsoft's fiscal year 2024. All participants are now in listen-only mode. The official lecture will be followed by a Q&A session. [Operator guidance] This conference is being recorded, just so you know.

I'd like to hand the phone over to Brett Iversen, vice president of investor relations, who will serve as your host. Iversen, you may proceed now.
Brett Iversen,Director of Investor Relations
Thank you for coming today; good day. Satya Nadella, chairman and CEO, Amy Hood, chief financial officer, Alice Jolla, chief accounting officer, and Keith Dolliver, corporate secretary and deputy general counsel, are all on the call with me. Our results press release and financial summary slide deck, which contains a reconciliation of differences between GAAP and non-GAAP financial measures, are available on the Microsoft Investor Relations website. These documents are meant to support our prepared remarks for today's call. When we provide discussion on the outlook on the call today, more in-depth outlook slides will be made accessible on the Microsoft investor relations website.
On October 13, 2023, Microsoft successfully acquired Activision Blizzard. During the call's outlook commentary, we will go into greater detail about the anticipated effects of the Activision purchase. We will talk about a few non-GAAP items on this call. The non-GAAP financial measurements presented shouldn't be viewed as an alternative to or better than the financial performance indicators calculated in accordance with GAAP. Microsoft is outclassed by 10 other stocks.

It could be wise to take attention when our highly-regarded research team offers a stock tip. After all, the market has tripled since they began publishing the Motley Fool Stock Advisor weekly more than ten years ago.
Microsoft wasn't listed among the ten equities they recently declared to be the best ones for investors to buy right now. Yes, they believe that these 10 equities are even better investments.
In addition to the impact these factors and events have on the financial results, they are given as additional clarifying items to help investors better understand the company's first quarter performance. Unless otherwise specified, any growth comparisons we offer on the call today pertain to the same period of last year. In order to evaluate the performance of our underlying businesses without taking into account fluctuations in foreign exchange rates, we will also give growth rates in constant currency when they are available.
We'll only use the growth rate in cases when rates of growth are identical in constant money.

Until the full transcript is available, we will post our prepared statements to our website right after the call. The call today will be streamed live and recorded. If a question is submitted, it will be answered during our live broadcast, in the transcript, and in any upcoming uses of the recording. On the Microsoft investor relations website, a replay of the call and a transcript are available.We'll be making predictions, projections, and other comments about the future throughout this call that are referred to as "forward-looking statements." These assertions are predicated on present expectations and assumptions, which involve risks and uncertainties.
The risk factors part of our Form 10-K, Forms 10-Q, and other reports and filings with the Securities and Exchange Commission, as well as the variables mentioned in today's earnings press release, in the remarks made during this conference call, and in the risk factors section of our Form 10-K and Form 10-Q, could significantly affect actual results. We don't have any commitment to update any of the forward-looking statements.

Brett, I'm grateful. The sustained success of Microsoft Cloud, which exceeded $31.8 billion in quarterly revenue, up 24%, has contributed to our solid start to the fiscal year. With Copilots, we are bringing the age of AI to life for everyone—people and enterprises alike.
For our clients' benefit, we are quickly integrating AI into every component of the tech stack and every function of business process.

I'll now provide examples of our development, starting with infrastructure. As businesses moved their workloads to our cloud, Azure once more dominated. With more than 60 data center regions throughout the world, we have the most extensive cloud footprint and the strongest AI infrastructure for both training and inference. In addition, we have more regions where our AI services are available than any other cloud provider.
We declared the general availability of our newest H100 virtual machines this quarter. Azure AI gives users access to top-tier frontier models from OpenAI and open-source models, such as our own, as well as models from Meta and Hugging Face, which they can utilize to create their own AI applications while still satisfying their needs for cost, latency, and performance. The Azure OpenAI service is now used by more than 18,000 companies, including new Azure customers, as a result of our overall distinction. Additionally, we are extending our reach to digital-first businesses through OpenAI APIs because top AI start-ups rely on OpenAI to power their AI solutions, making them Azure clients as well.
Azure Arc continues to be used for increasing cloud migrations. We are helping customers operate apps across on-premise, edge, and multicloud settings by going where they are. We currently have 21,000 Arc clients, an increase of 140% from last year. Customers may move their on-premise Oracle databases to our cloud more easily because we are the only other cloud provider that runs Oracle's database services.Customers will have access to a seamless, totally integrated experience for setting up, maintaining, and using Oracle database instances on Azure, including PepsiCo and Vodafone. Brother Industries, Hanes, Xis, and ZF Group all run SAP on Azure, and we are the cloud of choice for customers' SAP workloads.