Microsoft posted increased revenue year over year in its fiscal second quarter driven by its commercial business, specifically Microsoft Cloud.

WHY IT MATTERS: In the first half of fiscal 2023, more than 70% of revenue came from commercial business, and over 70% of the commercial business derived from Microsoft Cloud, Chief Financial Officer Amy Hood said during Tuesday’s earnings call.

BY THE NUMBERS: Microsoft posted in Q2:

• Revenue increased 2% YoY to $52.7 billion;
• Operating expenses increased 11% YoY to $14.4 billion; and
• Microsoft Cloud revenue increased 22% YoY to $27.1 billion.

STATE OF PLAY: Microsoft stock dipped 3.13% to $234.47 at market open today as the tech giant experienced a cloud outage early this morning, according to Microsoft’s website.

“We’ve isolated the problem to networking configuration issues, and we’re analyzing the best mitigation strategy to address these without causing additional impact,” the company said on Twitter.

NOTEWORTHY: This week, Microsoft invested $10 billion in fintech OpenAI, which supports AI tool ChatGPT.

“[Monday] we announced the completion of the next phase of our agreement with OpenAI,” Microsoft Chief Executive Satya Nadella said during the call, noting, “All of this innovation is driving growth across our Azure AI services.”

FLASHBACK: In October, Microsoft launched new capabilities in its Cloud for Financial Services platform to enhance risk, compliance and digital services for its financial institution clients including Wells Fargo, the tech giant said during an October webinar.

FUTURE LOOK: Microsoft witnessed increased tech spend by its clients and has shifted its priority to optimizing those technologies, Nadella said.

“This is an important time for Microsoft to work with our customers, helping them realize more value from their tech spend and building long-term loyalty and share position while internally aligning our own cost structure with our revenue growth,” he said.

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