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Cloud boosts Microsoft Q2; revenue up 17%

Cloud boosts Microsoft Q2; revenue up 17%
Photo Credit: Reuters
27 Jan, 2021

From cloud computing to gaming systems, technology giant Microsoft has seen its business grow amid the Covid-19 pandemic. 

For its second quarter ended December 30, 2020, the company reported a 17% increase in revenue at $43.07 billion, compared to $36.9 billion in the corresponding quarter last year.

The growth was led by demand for cloud services. “Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year,” Amy Hood, executive vice president and chief financial officer of Microsoft said in a statement. 

This cloud surge was also due to a 23% rise in the Intelligent Cloud segment, which includes Azure Public cloud, SQL Server, Windows Server, Visual Studio and a few others.  Revenue in Intelligent Cloud was $14.6 billion, the company said. 

Microsoft Azure, which competes with AWS and Google cloud platform, saw a rise in revenue by 50%, the company said. Microsoft does not provide specific financial performance details of Azure.

In terms of growth of specific offerings, Office 365 witnessed a revenue growth of 21%, while Linkedin revenue saw a rise of 23%( along with a 30% rise in engagement) and Dynamics 365 saw a healthy 39% increase. 

Its gaming wing Xbox’s content and services revenue also increased by 40%.

Microsoft said that its commercial bookings grew 19% year over year, led by consistent execution across core annuity sales.

Read: Microsoft offers private preview of new cloud platform for retailers  

“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,” Satya Nadella, chief executive officer of Microsoft, said.

“Building their own digital capability is the new currency driving every organization’s resilience and growth,” Nadella added.

The company also returned $10 billion to shareholders, which was up by 18% year over year, while operating expenses were up by 3% at $11 billion with Microsoft stating they were “partially offset by covid-related savings”.

Read: IBM sees cloud business soar amid overall revenue shrink; co eyes 2021 growth