Microsoft Q2 Earnings Highlights: Cloud Revenue Growth Of 26% Powers Double Beat, CEO Says 'Only At The Beginning Phases Of AI'

Microsoft Corporation (NASDAQ:MSFT) reported second-quarter financial results after market close Wednesday.

Here are the key highlights.

Microsoft Q2 Earnings

Microsoft reported second-quarter revenue of $81.3 billion, up 21% year-over-year. The total beat a Street consensus estimate of $80.25 billion, according to data from Benzinga Pro.

The company reported non-GAAP earnings per share of $4.14, beating a Street consensus estimate of $3.86.

This marked the 12^th consecutive quarter of beating analysts’ revenue estimates and the 14th consecutive quarter of beating earnings-per-share estimates.

Here's a look at Microsoft's revenue by reporting segment:

• Productivity and Business Processes: $34.1 billion, +16% year-over-year
• Intelligent Cloud: $32.9 billion, +29% year-over-year
• More Personal Computing: $14.3 billion, -3% year-over-year

The company reported that overall Microsoft Cloud revenue was $51.5 billion, up 26% year-over-year. Microsoft ended the quarter with $625 billion in commercial remaining performance obligations, up 110% year-over-year.

Microsoft 365 Commercial cloud revenue was up 17% year-over-year, with Microsoft 365 Consumer cloud revenue up 29% year-over-year.

The company's Azure and other cloud services had revenue up 39% year-over-year.

Within the More Personal Computing segment, Windows OEM and Devices revenue was up only 1% year-over-year with Xbox content and services revenue down 5% year-over-year.

"Microsoft Cloud revenue crossed $50 billion this quarter, reflecting the strong demand for our portfolio of services," Microsoft Chief Financial Officer Amy Hood said. "We exceeded expectations across revenue, operating income, and earnings per share.

What's Next for Microsoft Stock

The company will provide guidance during its conference call Wednesday night, which can be viewed below.

"We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises," Microsoft CEO Satya Nadella said. "We are pushing the frontier across our entire AI stack to drive new value for our customers and partners."

Microsoft Stock

Microsoft shares are trading lower by 5% to $457.03 in after-hours trading on Wednesday, versus a 52-week trading range of $344.79 to $555.45.

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