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Microsoft FY21 Q1: Cloud businesses supercharged by pandemic
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Published onOctober 27, 2020
published onOctober 27, 2020
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Microsoft’s fiscal year earnings are out and it seems thanks in large part to the pandemic, the company floats another impressive revenue-generating quarter.
In a turn of events from its last earnings report where the company noted that COVID-19 had a “minimal” negative impact on its bottom line, it now seems that three months later that COVID-19 has had a substantial impact on Microsoft’s bottom line for a net positive.
According toMicrosoft’s newly released FY21 Q1 earnings report, the company managed to beat revenue expectations of $35.76 billion to post an impressive $37.2 billion for the quarter.
The end result for investors was an earnings gain of $1.82 per share versus the street prediction of $1.55 and much of that growth was on the back of the company’s Intelligent Cloud which saw 48% revenue growth from this time last year.
Microsoft executive vice president and CFO Amy Hood highlighted the extraordinary circumstances of the pandemic and how the company is uniquely positioned to capitalize on its tangential effects.
“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31% year over year. We continue to invest against the significant opportunity ahead of us to drive long-term growth.”
Revenue inProductivity and Business Processeswas $12.3 billion and increased 11%, with the following business highlights:
Revenue inIntelligent Cloud was$13.0 billion and increased 20% (up 19% in constant currency), with the following business highlights:
Revenue inMore Personal Computingwas $11.8 billion and increased 6%, with the following business highlights:
At the end of the day, investors walked away happy with Microsoft returning $9.5 billion to shareholders through repurchases and dividends, which translated to a 21% increase in stock value year-over-year comparatively.
Interestingly enough, despite more people working from home and PC manufacturers in the US seeing their first increase in shipments in close to a decade, Microsoft’s More Personal Computing business seemed to be the albatross on the company’s back this quarter. Surface sales were down, Windows OEM Pro revenue was down 22% and Search is still trending downward.
Nadella will be giving guidance on the next quarter later today and we’ll have to see how Microsoft plans to address its MPC sector as businesses go into extended work-from-home situations, so that the MPC sector doesn’t start offset gains from the cloud.
Kareem Anderson
Networking & Security Specialist
Kareem is a journalist from the bay area, now living in Florida. His passion for technology and content creation drives are unmatched, driving him to create well-researched articles and incredible YouTube videos.
He is always on the lookout for everything new about Microsoft, focusing on making easy-to-understand content and breaking down complex topics related to networking, Azure, cloud computing, and security.
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Kareem Anderson
Networking & Security Specialist
He is a journalist from the bay area, now living in Florida. He breaks down complex topics related to networking, Azure, cloud computing, and security
