Microsoft posts $15.5bn second-quarter profit

Joanna Estrada
January 27, 2021

"What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry", said Satya Nadella, chief executive officer of Microsoft. "Building their own digital capability is the new currency driving every organization's resilience and growth".

Microsoft in November released two new Xbox consoles, its most visible non-work and non-school brand, but the hardware proved hard to find as a global semiconductor shortage contributed to tight stocks as many retailers.

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Among the company's three main business divisions, the biggest revenue increase came in the Intelligent Cloud segment, up 23% from the prior year to $14.6 billion. The big victor here was Xbox, which delivered 51 percent gaming revenue growth with Microsoft delivering a new console generation in the quarter. Not surprisingly, the company also saw a 40 percent increase in Xbox content ands services, as well as an 86 percent increase in Xbox hardware sales, both thanks to the release of its next generation consoles.

Windows OEM revenue increased 1%. Analysts are expecting a 41.4% rise in Azure sales, according to Visible Alpha.

Microsoft Corp on Tuesday reported its Azure cloud computing services grew 50%, as the global pandemic benefited the software maker's investment on working and learning from home.

Office Commercial products and cloud services revenue increased 11% driven by Office 365 Commercial revenue growth of 21%.

While Microsoft's upward trajectory was plotted many quarters ago, today's numbers are still a bit shocking to investors who hedge against minimal gains during a downturn in a stagnant economy.

"Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34 percent year over year", Microsoft CFO Amy Hood is quoted as saying of the quarter.

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