Microsoft To Offer One-Time Cash Reward To Employees Worth Up To 25% Of Their Bonus, After Q4 Earnings Beat Estimates: Report

Microsoft Corp. MSFT has announced a special one-time bonus for its employees after reporting fourth-quarter results and beating earnings estimates.

What Happened: The bonus will be equivalent to 10% to 25% of the regular annual bonus of employees. This announcement comes at the end of Microsoft’s fiscal year, coinciding with the company’s impressive performance in the cloud and AI sectors.

The bonus is also seen as a strategic move to retain talent in the competitive AI market, The Verge reported on Wednesday, citing an internal memo.

The company’s fourth-quarter earnings, released on Tuesday, revealed a 15% year-over-year increase in revenue, totaling $64.7 billion. This exceeded the Street’s consensus estimate of $64.36 billion.

Microsoft has been making significant strides in enhancing its AI capabilities. The company recently integrated advanced models from OpenAI and hardware accelerators from NVIDIA Corp. and Advanced Micro Devices, Inc. into its Azure cloud platform.

Microsoft did not immediately respond to Benzinga's request for comment.

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Why It Matters: The recent bonus announcement is in line with Microsoft’s ongoing efforts to recognize and reward its employees. In October, leaked documents revealed the different levels of pay, bonuses, and stock awards that Microsoft employees receive, providing insight into the company’s approach to employee compensation.

Despite the recent bonus announcement, AI stocks are expected to experience a temporary dip due to the company’s underperformance in the Azure sector. However, analysts remain optimistic about the long-term prospects of the AI industry, citing continued heavy investment in big tech infrastructure, particularly Microsoft’s Capex, which saw a 55% YoY increase.

Price Action: Microsoft Corp's stock closed at $422.92, down 0.89% on Tuesday. In after-hours trading, the stock fell further 2.72%. Despite this, the stock has risen 14.03% year to date, according to data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote