Azure boosts Microsoft's quarterly results

The quarterly results of Microsoft exceed analyst expectations. Net earnings per share (LPA) was $2,03, while forecasts were that Microsoft would reach an EPS of $1,64. the revenue of FY Q2 2021 (second quarter of fiscal 2021, which began in mid-2020 and ended on December 31, 2020) was $43,1 billion, representing a 17% increase over the previous year. Since the expectation announced by the Dow Jones Newswires was a revenue of US$ 40,2 billion. The company's net income was $15,5 billion, up 33% compared to the same period in 2019.

The financial market reacted well to Microsoft's quarterly results. After the release of the balance sheet and the closing of the stock exchange Nasdaq, Microsoft shares hit $243, up 5%. With that, the company reached a market value of US$ 1,75 trillion and is close to reaching a historic mark, reached only by Apple , worth $2 trillion. 

Cloud computing was largely responsible for Microsoft's quarterly results 

The pandemic of COVID-19 and social distancing reflected in Microsoft's quarterly results. With the increase in remote work, companies needed to make strategic changes and invest in cloud services and products to ensure the maintenance of activities. For Dan Ives, analyst at the consultancy WedBush Securities, home office ended up “further encouraging companies to make strategic changes to cloud services” and this ended up positively impacting Microsoft's quarterly results.

One of the highlights for the financial results achieved by the company was the Microsoft Azure, the cloud computing segment alone saw a 50% increase. The revenue in the smart cloud division, IntelligentCloud, was $14,6 billion, up 23% from the year-ago period. While the recipe for Commercial Office increased by 11% and the products and services of Office Consumer grew by 7%. In addition, the number of subscriptions to the Microsoft 365 Consumer reached 47,5 million.

Another segment that boosted Microsoft's results was the gaming segment. Which can also be justified by the coronavirus pandemic. With social isolation, many people turn to entertainment alternatives at home. As a reflection of this scenario, Microsoft saw the division of contents and services of Xbox grow 40%.

only the Game Pass reached the mark of 18 million subscribers, while the Xbox Live has 100 million monthly active users. Furthermore, the launch of Xbox Series X and Series S also impacted Microsoft's results, with the revenue from the hardware rose by 86%.

Microsoft also saw revenue from LinkedIn increase by 23%, thanks to the increase in demand for marketing and advertising solutions deployed by the platform such as introduction of a new product page, aimed at generating leads.

The expectation is that Microsoft's cloud segment continues to grow. According to Satya Nadella, CEO of the company, 2020 was a year of digital transformations and Microsoft “is driving that change”. Currently, Microsoft is the second largest company to offer services and products in the cloud, behind only the platform Amazon Web Services.

Source: Microsoft; ZDNet Windows Center [1]and [2] MS Power User [1] e[2]