Microsoft Q2 2020: Earnings Up 38,3%, $8,5B Return for Investors

A Microsoft has just revealed its fiscal performance report to the second quarter 2020. Ending on December 31, this stretch of the company's fiscal year was marked by US$ 36,9 billion in revenue (about R$ 156 billion) and a net profit of US$ 11,6 billion (R$ 49,7 billion). Compared to the period last year, the high in earnings was 38,3%, mainly driven by the company's cloud services, in addition to sales of the Surface line and Office suite licenses.

Traditionally, second quarter earnings privilege some sectors company, such as the Surface line. in Q2 of last year, Microsoft's line of computers and peripherals also saw an increase, and now the line's revenues are approaching US$ 2 billion (R$ 8,47 billion). THE recent line expansion, which won the models Surface Laptop 3, Surface Pro 7 e Surface ProX, in the last year, certainly has weight in the increase of 6% in sales compared to 2019.

In the near future, Microsoft still intends to launch a pair of headphones for the Surface line and devices Surface Neo e Surface Duo, the first being a computer with two screens and Windows 10X, and the second a smartphone with two screens running Android. Added to this, the renewal of models such as the Surface Book e Surface GB should make the company's hardware segment even more important to profits.

With the report, the company still reveals that it has returned $8,5 billion for investors, considering dividends and share buybacks. The company's CEO, Satya Nadella, also stated that the company is “innovating in all layers of its differentiated technologies and leading areas that are crucial to customer success. On the occasion, Nadella also said that the company is concerned with building inclusive, safe and sustainable.

Games down, Windows up

If sales go from strength to strength in PCs, the segment of games of the company, which involves games for Windows and Xbox, registered drops: in the mentioned period, revenue from games dropped 21%, with only Xbox responsible for the drop in 11%. According to the Redmond giant, expectations are that the numbers keep falling, at least until the games sector picks up steam with the arrival of new generation consoles.

As the sales of games and consoles fall, the company's focus turns to subscriptions. In 2020, Microsoft will invest even more in the Xbox Game Pass, which allows the user to access a vast catalog of games at the price of a single monthly fee. Furthermore, as did the Google to Stadia, the company is preparing to launch, coming soon, its own cloud-based gaming service, the xCloud.

Although the results are not the best, the company faces a phase of transition in the games market and has several proposals for the future. This fact alone shows that sales must improve with the next generation of consoles, and if streaming games gain ground, Microsoft will be ready.

leaving for the Windows, which has long ceased to be the company's biggest source of revenue, the news is best. O end of support for Windows 7 reduced operating expenses with a product that no longer generates earnings. In addition, the incentives in the transition from the old system to the current Windows 10 made the company see the biggest high in the segment since 2011. In practice, more PCs were sold and, consequently, more licenses operating system being activated.

Windows revenue grew 18%, while total commercial gains from the system rose 25%. These gains also include the revenue obtained from other services included in the system. The program subscriptions Office 365, in turn, continue to be a huge source of income, recording incredible 32,2 million subscriptions and increase 19% in revenue.

Office and cloud are still the great assets of Microsoft

The numbers don't lie: In addition to the increase in Office 365 subscriptions, and the trailers to this, it is the company's cloud services that generate the most promising gains. Called by Microsoft "smart cloud“, the sector includes the Azure, Platform of cloud computing from Microsoft, and other cloud-based services. In Q2020 XNUMX, Azure grew 62% and gains from all the smart cloud, 27%, reaching US$ 11,9 billion (R$ 50 billion).

Overall, the three pillars that make up Microsoft's revenues record the following numbers:

• Office, LinkedIn and Dynamics (Productivity and Business) – $11,8bn, with an increase of 17%
• Azure and Enterprise Services (Smart Cloud) – $11,9bn, with an increase of 27%
• Windows; Surface; Xbox and games; Bing Advertising (Personal Computing and More) – $13,2 billion, with an increase of 2%

As expected, Microsoft's biggest growth expectations are in the Office and in others services cloud-based. Although it is still the most profitable part of the company, the personal computing is based on products with low growth potential, such as Xbox and Windows. Already the acquisition of LinkedIn, in 2016, served to vary even more the giant's operations and continues to bear fruit, with growth of 24% for the reported period.

Source: The Verge

(yourolddog.com)