Microsoft's Quarterly Earnings

Microsoft's Quarterly Earnings

over 3 years ago2 mins

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Microsoft reported earnings late on Wednesday – and judging by the boost its shares received, investors appreciated the je ne sais quoi of the piece 🖼

What does this mean?

Microsoft’s quarterly revenue and profit came in above investor expectations, and it wasn’t just down to its all-important cloud business. Its other two businesses played their part too: personal computing – which includes Xbox, Windows, and the search advertising revenue brought in when your grandparents use Bing 💰 – and productivity – think Microsoft Office and LinkedIn. Each of them contributes about a third of Microsoft’s total revenue, and they both grew more quickly than analysts had anticipated.

Source: Google Finance
Source: Google Finance

Why should I care?

Demand for cloud computing – which gives employees access to business resources from anywhere – has rocketed since the pandemic first herded us all into our homes ☁️ That might be why Microsoft’s cloud segment grew by a better-than-expected 20% – even more than the quarter before. That means cloud products now make up a third of its revenue, and the company’s said – with a pluck that might make European rival SAP nervous – that it’s only just getting warmed up.

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Microsoft might’ve smashed it, but a few tech companies have struggled to live up to the record-breaking demand they experienced earlier on in the year. Just look at Netflix: the streaming giant wooed so many subscribers in the first half of 2020 that it was slim pickings last quarter, leading investors to ditch its stock 📉 Intel ran into the same problem: demand for the chipmaker’s data centers – sky-high just a few months ago – plunged last quarter. Investors will be hoping that doesn’t happen again on Thursday – that busy October day when Alphabet, Amazon, Apple, and Facebook all report their latest earnings.

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