Microsoft Posts Strong Earnings, Despite Slowing Cloud Growth
Microsoft surpassed Wall Street estimates for the December quarter, with better-than-expected revenue and earnings, despite slowing growth in its Azure Cloud computing division.
The company reported adjusted earnings of US$2.48 per share, beating the forecast $2.31 per share.
Revenue hit $51.73 billion, well above the Wall Street estimates of $50.88 billion, and up 20 per cent from the prior year, and 22 per cent from the September quarter.
Amy Hood, Microsoft’s finance chief, told investors the tech giant expects revenue of $48.5 billion to 49.3 billion in the fiscal third quarter, well above Wall Street forecast.
This quarter does, however, mark the first year in over a year, that revenue from Azure and other cloud services grew less than 50 per cent, with growth of ‘only’ 46 per cent suggesting a slow down.
Hood, however, said there will be “a sequential growth acceleration in constant currency in the current quarter for Azure.”
CEO Satya Nadella pointed at the massive success of Windows 11, which launched during the quarter, alongside a budget Surface Laptop SE preloaded with version of Windows 11, aimed at students.
“There are now more than 1.4 billion monthly active devices running Windows 10 or Windows 11,” Nadella said, in comparison to 1.3 billion active Windows 10 devices, as of April 2021.