[ad_1]
MICROSOFT CORP. It reported Tuesday that its Azure cloud computing services grew 50%, the second quarter of acceleration in a business that had begun to slow down as the global pandemic benefited the software maker’s investment in working and learning from home.
The company’s shares rose 5% in extended trading after gaining about 41% in 2020 when COVID-19 shifted computing to areas where the software maker has bet big. He also saw a surprise recovery in sales on professional social network LinkedIn and navigated a chip shortage that had threatened to slow down his Xbox business.
The shift to work from home due to the COVID-19 pandemic has accelerated businesses’ shift to cloud-based computing, benefiting Microsoft and rivals such as Amazon.com, Inc.’s cloud unit and Google Cloud’s. Alphabet, Inc.
In a conference call with investors, Microsoft executives said they expect a midpoint of $ 14.83 billion in revenue from the company’s “Intelligent Cloud” segment for the fiscal third quarter, compared to Wall Street’s expectations of $ 14,100. million, according to Refinitiv data. For the company’s productivity segment and its personal computing segment, sales are expected to have a respective midpoint of $ 13.48 billion and $ 12.50 billion, compared to estimates of $ 12.90 billion and $ 11.60 billion. million, according to Refinitiv data.
Microsoft said GamePass, the company’s $ 10 monthly gaming subscription, has 18 million users, up from 15 million revealed in September. The Xbox Live online gaming service has more than 100 million monthly active users. Microsoft did not give an update on the 115 million daily users of Teams it revealed in October, but did say that the mobile version is used by 60 million daily users.
Microsoft said that revenue in its “Intelligent Cloud” segment increased 23% to $ 14.6 billion, with 50% growth in Azure. Analysts were expecting 41.4% growth in Azure, according to consensus data from Visible Alpha. The previous quarter, Azure grew 48%.
“This was really driven by continued customer demand, with consumption stronger than expected as customers have increased their focus on digital transformation,” Microsoft CFO Amy Hood told Reuters in a interview.
Atlantic Equities analyst James Cordwell said that last year, “economic weakness and implementation delays had masked the extent to which Azure was benefiting from the accelerated shift to the cloud caused by the pandemic. But with these results, that benefit is now evident. “
LinkedIn’s revenue growth, which slowed when the pandemic shuttered businesses, reached 23%, close to its pre-pandemic rate of 24% a year earlier. Hood said ads on LinkedIn drove the increase.
“We continue to see a recovery in the advertising market,” he said.
Microsoft bundles several suites of software and services, such as Office and Azure, into a “business cloud” metric that investors closely watch to measure the company’s progress in selling to large companies.
Gross margins for commercial cloud, a measure of the profitability of its sales to large companies, were 71% in the quarter, compared with 67% a year earlier.
Revenue from its personal computing division, which includes Windows software and Xbox game consoles, increased 14% to $ 15.1 billion, driven by strong growth in Xbox content and services, beating analyst estimates. of $ 13.5 billion, according to IBES data from Refinitiv.
Microsoft launched two new Xbox consoles in November, its most visible non-work and non-school brand, but the hardware proved difficult to find as a global semiconductor shortage contributed to stock shortages as many retailers. Xbox hardware sales were up 86% despite the shortage, and Hood said growth is likely to continue, with older models contributing to sales as well.
“Demand still exceeds supply and we expect it to continue,” Hood said. “The team did a good job of sourcing consoles, both from this new generation and continuing to sell the previous generation, which provides great value for gamers.”
Microsoft’s gaming business surpassed $ 5 billion in quarterly sales for the first time and was driven by game subscriptions and sales, as well as new consoles. Microsoft said Xbox content and services revenue grew 40% in the quarter.
The software giant’s overall revenue rose to $ 43.08 billion in the second quarter ending December 31, from $ 36.91 billion a year earlier, beating analyst estimates of $ 40.18 billion, according to IBES data. from Refinitiv. – Reuters
[ad_2]
