- Microsoft CEO Satya Nadella said in the case of a recession, the company would focus on both helping its customers and buttressing its stock price. Amid an uncertain economic outlook in the fallout of Trump’s so-called Liberation Day tariffs, Microsoft posted a strong quarter and all three of its businesses exceeded expectations.
Microsoft CEO Satya Nadella is doubling down on the $2.9 trillion software giant’s customer-first strategy amid economic challenges like inflation and growth.
Nadella said the company will focus on customers first, which will ultimately fuel Microsoft’s rise. Microsoft stock rose more than 7.7% in after-hours trading Wednesday, and is up more than 1.5% from a year earlier after posting strong quarterly financial results on Wednesday.
“I think if you sort of buy into the argument that software is the most malleable resource we have to fight any type of inflationary pressure or any type of growth pressure where you need to do more with less,” Nadella said.
“And so if anything, we would probably have more of that mindset is how do we make sure we are helping our customers, and then, of course, we look to share gains,” he added.
Amid the continued economic uncertainty during the fallout of Donald Trump’s trade policy, Nadella’s Microsoft wasn’t just unfazed, but conquered its quarterly expectations from January. Quarterly revenue was up more than 13% year over year to $70.1 billion and net income reached $25.8 billion, up 18%.
Microsoft’s cloud computing business, which includes Azure, reported a 21% increase in sales from a year ago to $26.8 billion, more than its forecasted sales of $25.9 billion to $26.2 billion. That business—which is highly scrutinized by investors—typically portends a continued demand for AI infrastructure, but chief finance officer Amy Hood emphasized that it was Azure’s non-AI business that outperformed expectations.
While the AI business continued to succeed “the majority of our outperformance versus where we had expected to be was on the non-AI piece of the business,” Hood said.
Additionally, Microsoft exceeded its quarterly guidance across the company’s three main business sectors. Its productivity and business unit, which revolves around Microsoft 365 products, increased revenue by more than 10% to $29.9 billion ahead of its projected $29.7 billion. The company’s personal-computing business grew 6% in the quarter, incurring sales of $13.4 billion, more than the forecasted $12.4 to $12.8 billion in sales. Overall, profit increased 17.76% from $21.93 billion to $25.82 billion year over year.
In his remarks, Nadella emphasized the company’s ability to shift its infrastructure as needed to fit evolving client needs if the U.S. were to enter a recession.
Microsoft would “be very focused on how we help out customers if there is any turbulence in the macro,” Nadella replied.
