Microsoft CFO's memo to staff calls out AI deals, coding, and chips

"Team, This afternoon, we announced our second-quarter financial results. We exceeded Wall Street expectations, growing revenue 17% and 15% in constant currency and operating income by 21% and 19% in constant currency -a strong finish to the first half of the fiscal year. In the quarter, Microsoft Cloud revenue surpassed $50 billion for the first time, growing 26% and 24% in constant currency. There were many highlights this quarter, but a few stand out as reminders of the value our products and services d"

"Still, these memos provide insight into what Microsoft executives deem most important, and what they want employees to know. The latest memo highlighted how Microsoft is gaining share in markets where the total addressable market is expanding. Hood specifically mentioned the launch of the GitHub Copilot software development kit in the growing market of AI coding tools, and the release of Microsoft's new Maia 200 AI chip."

"Hood specifically mentioned the launch of the GitHub Copilot software development kit in the growing market of AI coding tools, and the release of Microsoft's new Maia 200 AI chip. Hood's email also called out Azure commitments from OpenAI and Anthropic that helped increase commercial bookings, basically the deals Microsoft closed in the quarter, by 230%, year over year. Capital expenditure on computing and datacenter infrastructure also broke yet another quarterly record, reaching $37.5 billion, she also noted."

Microsoft reported $81 billion in second-quarter revenue, with revenue growth of 17% (15% in constant currency) and operating income growth of 21% (19% in constant currency). Microsoft Cloud revenue exceeded $50 billion for the quarter, growing 26% (24% in constant currency). New product highlights included the GitHub Copilot software development kit and the Maia 200 AI chip. Azure commitments from OpenAI and Anthropic materially boosted commercial bookings, which rose 230% year over year. Capital expenditure on computing and datacenter infrastructure reached a quarterly record of $37.5 billion, reflecting continued investment in cloud capacity.

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