When Microsoft Corp reports earnings on Wednesday, analysts expect some areas of its business to be affected by the new coronavirus pandemic, with lower-than-expected sales in areas such as advertising on its LinkedIn social network.
Windows Commercial products and cloud services revenue grew 17%.
While there was increased demand for Microsoft's personal computing, Windows OEM and Surface, this was partially offset by supply chain constraints in China, though these issues began to ease in late March. Nadella noted that its Xbox Live online gaming service had almost 90 million monthly active users, and its Xbox Game Pass, which provides access to its game catalogue, had more than 10 million subscribers in the period, both records for the company.
Revenue for Microsoft's corporate and consumer Office products increased by 13 and 15 percent, respectively. The net income was posted at $1.40 per share against a Wall Street projection of $1.27 a share.
Microsoft shares rose 1.5 per cent in extended trading following the report. Microsoft said that result was driven by a 59% increase in revenue for its Azure cloud platform, "due to higher infrastructure-as-a-service and platform-as-a-service consumption-based services and per user-based services".
In an interview, Microsoft Chief Financial Officer Amy Hood said some of the increased Teams usage came from customers with access to the software as part of a broader subscription and turned it on for the first time. That's up from $1.14 per share on $30.57 billion in revenue a year ago and well ahead of analysts' expectations of a $1.27-per-share profit on $33.76 billion in sales.
In an earnings call, the company reported a profit of $10.75 billion, up 22 per cent from the same period a year ago, on sales of $35 billion. Net income reached Dollars 10.8 Billion as diluted earnings per share amounted to USD 1.40. Gaming benefited from increased engagement following stay-at-home guidelines.
"Now more than ever, organizations are relying on Azure to stay up and running, driving increased usage", Nadella said, noting Microsoft has "more datacenter regions than any other cloud provider - and this quarter we announced new regions in Mexico as well as in Spain".
Revenue in the Intelligent Cloud segment, which includes Azure, rose 27 percent to $12.28 billion (roughly Rs. 92,000 crores), beating analysts' consensus estimate of $11.87 billion (roughly Rs.89,000 crores) according to IBES data from Refinitiv.
Drops occurred in transactional licensing, especially for the small and medium-sized business segment, which has been particularly hard-hit by the coronavirus-related downturn.
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