Microsoft HQ

Azure, Xbox boost Microsoft’s fiscal Q2 earnings

Microsoft kicked off the earnings week with a report of 17% increase in revenue or $43.1 billion, driven primarily by its cloud services (Microsoft Azure) and gaming (Xbox).

Microsoft’s server products and cloud services revenue increased 26% (up 24% in constant currency) with Azure posting a growth of 50% (up 48% in constant currency). Xbox content and services revenue increased 40% (up 38% in constant currency).

The work-from-home setup drove cloud adoption to ensure business continuity while gaming also reported a massive increase in users and time spent.

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“What we have witnessed over the past year is the dawn of the second wave of the digital transformation sweeping every company and every industry,” said Satya Nadella, chief executive officer of Microsoft, in the company’s media advisory. “Building their own digital capability is the new currency driving every organization’s resilience and growth. Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform.”

Microsoft’s personal computing revenue was up 14% ($15.1 billion) from 13% in constant currency.

Cloud revenue

“Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to benefit from our investments in strategic, high-growth areas.”

It’s subsidiary, LinkedIn, posted a revenue increase of 23% (up 22% in constant currency). For its search engine Bing, advertising revenue excluding traffic acquisition costs increased 2% (up 1% in constant currency).

Revenue in productivity and business processes was $13.4 billion and increased 13% (up 11% in constant currency), as well.

For devices, Microsoft’s laptop brand Surface also reported a revenue increase of 3% (up 1% in constant currency).

Microsoft returned $10 billion to shareholders in the form of share repurchases and dividends in the second quarter of the fiscal year 2021, an increase of 18% compared to the second quarter of the fiscal year 2020.