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Coding assistant GitHub Copilot is a major driver of Microsoft’s business model, and the company expects it to continue to grow.
Microsoft CEO Satya Nadella noted the importance of Copilot during a July 30 earnings call with investors. The coding tool, according to Nadella, “accounted for over 40% of GitHub’s revenue growth this year and is already a larger business than all of GitHub was when we acquired it.”
“GitHub Copilot is by far the most widely adopted AI-powered developer tool,” Nadella said. “Just over two years since its general availability, more than 77,000 organizations, from BBVA, FedEx, and H&M to Infosys and Paytm, have adopted Copilot, up 180% year over year.”
Up and down. The Q4 earnings call presented an overall positive picture for Microsoft. But it also led to a temporary dip in share price after the company reported a lower than expected increase in revenue for its cloud business, specifically the flagship Azure product. The $28.5 billion in revenue for Microsoft’s Intelligent Cloud segment, of which Azure is a part, was below the analyst-predicted $28.7 billion.
Microsoft CFO Amy Hood was optimistic about the future of the technology, downplaying the dip in expected revenue.
“Revenue will continue to be driven by Azure, which, as a reminder, can have quarterly variability primarily from our per-user business and in-period revenue recognition depending on the mix of contracts,” Hood said.
Moving and shaking. The street agreed. On July 30, Microsoft shares were up 12% year to date. That capped an eventful month for the company—on July 18 and 19, an outage tied to the company’s security vendor, CrowdStrike, shut down machines across the globe, affecting everything from financial services to flights. And on August 8, the company announced a partnership with Palantir to provide cloud, AI, and analytics services to the federal government’s security agencies.