Microsoft’s second quarter blew by expectations as its commercial cloud sales surged 34% en route to a $66.8 billion annual revenue run rate.
The company reported second quarter net income of $15.5 billion, or $2.03 a share, on revenue of $43.1 billion, up 17% from a year ago.
Wall Street was expecting Microsoft to report second quarter earnings of $40.18 billion with earnings of $1.64 a share.
CEO Satya Nadella said digital transformation and cloud demand drove results for Microsoft. Indeed, Azure revenue growth was up 50% in the second quarter.
Microsoft’s growth was strong across most product lines.
Analysts said that Microsoft has benefited from COVID-19 and remote work. Daniel Ives, an analyst at Wedbush, said:
For Redmond, this cloud shift and WFH dynamic looks here to stay and the company stands to be a major beneficiary of this trend on its flagship Azure/Office 365 franchise over the coming years. With 35% of workloads in the cloud today poised to hit 55% by 2022, we believe this WFH shift has accelerated the cloud trend by roughly a year as more CIOs are now being forced to face the new normal/reality for their respective organizations looking ahead. With this highest IT priority front and center, we believe 85%-90% of these cloud deployments have already been green lighted by CIOs and healthy cloud budgets already in place for 2021, with Redmond firmly positioned to gain more market share in this cloud arms race.
Among the key figures:
- Productivity and Business Processes revenue was $13.4 billion, up 13% from a year ago.
- Commercial Office 365 revenue growth was 21%.
- Microsoft 365 Consumer subscribers ended the quarter at 47.5 million.
- LinkedIn revenue was up 23%.
- Dynamics 365 revenue growth was 39%.
- Intelligent Cloud revenue was $14.6 billion, up 23%, led by Azure.
- More Personal Computing revenue was $15.1 billion, up 14%.
- Surface revenue was up 3% with Xbox content and services revenue up 40%.
- Windows Commercial products and cloud services revenue was up 10%.
This article is auto-generated by Algorithm Source: www.zdnet.com