MS Reports Better-Than-Expected Earnings Driven by Cloud Growth

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Microsoft (MS) recorded earnings that exceeded Wall Street expectations for the first quarter (January to March) this year, driven by the growth of its Azure cloud platform.

According to Bloomberg and other sources on the 26th (local time), MS announced that its fiscal third-quarter (January to March) revenue reached $49.36 billion, an 18% increase compared to the same period last year. This surpassed market estimates of $49.05 billion. Net income rose 8% year-over-year to $16.7 billion.

This strong performance was driven by sustained high demand for cloud services and enterprise collaboration software, which had significantly increased during the COVID-19 pandemic.

Breaking down the details, the Intelligent Cloud segment, which includes SQL Server, Windows Server, and Azure cloud services, posted revenue of $19.05 billion, up 26% year-over-year. In particular, Azure and other cloud services saw a 46% surge in revenue compared to a year ago. The Personal Computing segment, responsible for PC and gaming businesses, recorded $14.5 billion in revenue, an 11% increase from the previous year.

Earlier in January, MS announced its plan to acquire video game company Activision Blizzard for $68.7 billion. This is the largest acquisition in MS history and is expected to strengthen MS's video game subscription service 'Game Pass' and contribute to building the metaverse, a three-dimensional virtual world.

Following the earnings announcement, MS's stock price rose nearly 5% in after-hours trading. Although the Nasdaq in New York fell sharply during the day, closing down 3.74% at $270.22, the strong earnings report released after market close has driven the stock price upward.

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