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Microsoft Q2 2021 earnings: Game Pass bet paying off, Surface hardware hits $2 billion in revenue
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Published onJanuary 26, 2021
published onJanuary 26, 2021
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The pandemic hasn’t slowed Microsoft’s march to profits as it rounded out an arguably disruptive 2020 calendar, on a high note. According tothe latest fiscal earnings report,Microsoft’s Q2 2021 results were rather impressive with the company adding $15.5 billion to its coffers. To put that amount in context, Microsoft just made back its large investment in Bethesda with an extra investment to spare, over the past three months.
Aside from delivering a 34% increase in stock value at $2.03 a share for investors, Microsoft also managed to increase its revenue by 17%, bring in 47.5 million Microsoft 365 subscribers, increase its gaming revenue by 51%, bring up hardware sales by 86% and finally hit that elusive $2 billion marker for Surface revenue.
For more details and context, below are the investor’s notes Microsoft’s chief financial officer Amy Hood touched upon during her opening remarks to investors.
Revenue inProductivity and Business Processeswas $13.4 billion and increased 13% (up 11% in constant currency), with the following business highlights:
Revenue inIntelligent Cloudwas $14.6 billion and increased 23% (up 22% in constant currency), with the following business highlights:
Revenue inMore Personal Computingwas $15.1 billion and increased 14% (up 13% in constant currency), with the following business highlights:
“Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year. We continue to benefit from our investments in strategic, high-growth areas.”
Distilling the numbers further, it’s apparent that Microsoft’s gamble on Xbox Game Pass is working for now as it helped guide revenue growth by 40% during a quarter where the division had few exclusive titles to push digital sales. In addition, Microsoft’s aggressive pricing and low tier entry Surface devices are resonating with its commercial base as its Surface revenue growth outpaces its Windows 10 OEM partner licensing growth.
Azure continues to make strides year over year as Microsoft adds larger multi-year contracts notches to its belt that include the DoD, Walmart, and others.
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. With more people slowly going back to work and Microsoft’s hybrid on-premises cloud solutions holding steady, it’ll be interesting to see if the company can shock again in a few months.
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
