Due to COVID-19 Driven Cloud and Video Game Demand... MS Reports Better-than-Expected Earnings

12% Sales Increase from July to September... Exceeding Market Expectations
'Cloud Computing' Azure Sales Up 48%... Game Content Business Also in Focus

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Microsoft (MS) posted third-quarter (July-September, fiscal year 2021 Q1) results that exceeded market expectations, driven by a significant increase in demand for cloud computing services and video games amid the COVID-19 pandemic.

According to Bloomberg and other sources on the 27th (local time), MS announced its fiscal year Q1 results, reporting revenue of $37.2 billion, a 12% increase compared to the same period last year. This surpassed Bloomberg's forecast of $35.8 billion. Net income was $13.9 billion, and earnings per share were $1.82, both exceeding market expectations.

MS's performance was led by growth in its cloud computing service segment, Azure. Azure's revenue surged 48% year-over-year. Although Azure's specific revenue was not disclosed, total commercial cloud revenue, including Azure, increased 31% from $11.6 billion to $15.2 billion.

The pandemic-driven rise in remote work and accelerated infrastructure improvements centered on cloud computing by U.S. companies appear to have contributed to MS's rapid growth in this segment. CFO Amy Hood stated, "Demand for cloud services strongly drove the start of the fiscal year."

The PC segment also showed solid performance, growing 6% year-over-year to $11.8 billion. Notably, gaming content revenue increased 30% compared to the same period last year. With the upcoming release of the new game console Xbox Series X at the end of the year, the gaming content business is expected to gain further momentum.

MS CEO Satya Nadella said in a statement, "The economic performance of all businesses over the next decade will be determined by the pace of digital innovation." Following the earnings announcement, MS's stock closed up 1.51% at $213.25.

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