Microsoft announced on Wednesday that its revenue for the quarter spanning October to December reached $81.3 billion, a 17 percent increase over the same period last year, as it seeks to promote the adoption of artificial intelligence tools globally.
Microsoft reported net income of $30.9 billion, or $4.14 per share, for the quarter, exceeding Wall Street expectations. These results did not include the impact of Microsoft's investment in OpenAI, the developer of ChatGPT software.
According to analysts surveyed by FactSet Research, Microsoft was expected to report earnings of $3.91 per share and revenue of $80.31 billion for the quarter.
Microsoft's profits reached a higher level of $38.5 billion, or $5.16 per share, when excluding its investment in OpenAI, reflecting a new accounting practice that the company said it would adopt in the future.
These investments reflect the restructuring process that OpenAI underwent last year; Microsoft owns a stake of approximately 27 percent, or $135 billion, in the startup that transformed from a non-profit organization into a for-profit public benefit company.
Although it is no longer the exclusive provider of cloud computing services for OpenAI, a relationship that helped fund the AI company's early growth, Microsoft will retain commercial rights to OpenAI products until 2032.
Sales in Microsoft's AI-focused cloud computing division reached $32.9 billion during the last three months of the year, a 29 percent increase from the same period last year, exceeding analysts' expectations of $32.4 billion.
Despite exceeding expectations, Microsoft's stock fell by nearly 5 percent in after-hours trading following the release of the earnings report.
