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.

Microsoft’s cloud, server segments propel rise in earnings, revenue

Microsoft’s cloud business reports growth during the pandemic

ā€œWhat we have witnessed over the past year is the dawn of the second wave of the digital transformation sweeping every company and every industry,ā€ said Satya Nadella, chief executive officer of Microsoft, in the company’s media advisory. ā€œBuilding 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.ā€

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

Cloud revenue

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

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.