Microsoft beat economists’ expectations, reporting first-quarter revenue of $50.12 billion (£43.66 billion).
That compares with $45.32 billion a year earlier and analysts’ forecast of $49.61 billion, according to Refinitiv IBES data.
While business spending has taken a broader hit, products like Outlook and Teams have made the company key for businesses that continue to use flexible working models.
Net income fell to $17.56 billion, or $2.35 per share, from $20.51 billion, or $2.71, in the quarter ended Sept. 30
per share, a year ago.
However, the news was even more bearish for Alphabet, which owns Google, as it missed quarterly revenue expectations.
Alphabet has been hit by falling revenue as advertisers cut costs.
Total revenue for the quarter ended Sept. 30 was $69.09 billion, compared with $65.12 billion for the year, the company said
Analysts on average expected revenue of $70.58 billion, according to Refinitiv data.
Net income fell to $13.91 billion, or $1.06 a share, from $18.94 billion, or $1.40 a share, a year earlier.
UK regulator gets global competition pledge from Google
Microsoft ‘cuts about 1,000 jobs’ as tech giant deals with tough global economy
Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown, said: “The slowdown in ad revenue is not surprising, but the pace of the slowdown is unpleasant and the market remains highly sensitive to changing tides.
“A weak economic outlook always hinders a company’s ability to pay for marketing. Many tech companies rely on advertising revenue, and the changing economic situation caused Snap’s stock price to slide earlier this month.
“The reason Alphabet hasn’t followed to the same extent is because it’s totally indispensable. Demand may ebb and flow, but it’s never completely shut down, and that’s reflected in the pretty good share price performance last month.
“Google is not a trend that is likely to dissipate, it is a basic daily activity for most of the world’s population.
“Fundamentally, the only real long-term risk to the Alphabet investment case is an intensified antitrust situation.
“There will be further political and legal scrutiny. This is a situation that shouldn’t be.
“The deep pockets mean that Alphabet can handle these financially, but it’s going to be a bigger problem if today’s more ethically conscious investors are to reach the end of their patience.”