Microsoft's Mixed Feelings Despite Strong Performance Amid COVID-19

MS, 2Q Revenue 45.5 Trillion KRW... 15% Increase YoY

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Microsoft (MS) recorded solid results in the second quarter despite the impact of the novel coronavirus disease (COVID-19). However, concerns have arisen as the growth rate of Azure, MS's core cloud service business, has slowed down.

On the 22nd (local time), MS announced that its second-quarter revenue reached $38 billion (approximately 45.5 trillion KRW), a 13% increase compared to the same period last year. Net profit reached $11.2 billion (approximately 13.4 trillion KRW).

This exceeded Wall Street's earnings expectations, and it is analyzed that the cloud service business contributed to the revenue as the trend of non-face-to-face (untact) transitions such as social distancing and remote work spread amid the COVID-19 pandemic.

MS did not disclose Azure's revenue separately but stated that revenue increased by 47% compared to the same period last year.

However, the revenue growth rate of Azure recorded 47% this quarter, following 64% in the fourth quarter of last year and 59% in the first quarter of this year, raising concerns that Azure's growth momentum is slowing down.

The total cloud segment revenue, including Azure, was $13.37 billion, growing 17% during the same period. The productivity and business processes segment, which includes LinkedIn, sales management software Dynamics, and office software Office 365, recorded revenue of $11.75 billion, a 6% increase.

The personal computing segment also saw a 14% increase in revenue to $12.91 billion during the same period.

Satya Nadella, MS CEO, said, "The COVID-19 pandemic has made it clear over the past five months that a focus on information technology (IT) is key to corporate resilience," adding, "Organizations that have built their own digital capabilities will recover faster and emerge stronger after the crisis."

This content was produced with the assistance of AI translation services.