As the pandemic continues to ravage to different businesses, demand for some other brands are favored more than the others. Microsoft found a way to position itself well in the midst of this coronavirus outbreak, in terms of revenue growth.
Growth in revenue
On Wednesday, Microsoft reported a revenue of $38 billion for the previous quarter. This figure surpassed Wall Street analysts’ expectations which is about $36.5 billion. It is also 13 percent higher than revenue from last year’s same timeframe. On the other hand, the quarter prior, which is not much affected by the health crisis, saw 15 percent rise.
Even share prices also outdid experts’ analysis. Microsoft managed to carry out earnings to a $1.46 per share, well above the predicted $1.34 a share. Their operating expenses rise by 13 percent for the quarter, which include spending for their plans of closing retail stores.
The Intelligent Cloud services of the company, including Azure, also exceeded expectations, earning $13.4 billion against a $13.1 billion projection. Microsoft reported that for the fiscal year, its commercial cloud services saw revenue of more than $50 billion.
Though no further breakdown was provided, but they mentioned growing 47 percent for the Azure platform, which is lower from prior quarter’s 59 percent giving investors something to worry.
This uplift in their cloud service business, in addition to boost in their personal computing and productivity and business processes, was due to many employees being asked to report to work from home. Office 365 Commercial added 19 percent, while personal computing saw 14 percent increase.
According to CEO of Microsoft Satya Nadella, “The last five months have made it clear that tech industry is the key to business resilience. Organizations that build their own digital capability will recover faster and emerge from this crisis stronger.”
However, the company’s stock still saw a dip of 2.5 percent during after-hours trading moments the earnings were revealed.
While they managed to surpass projections, analysts are worried about the challenges Microsoft may encounter in the future. This could include further disruptions in businesses which could lower the dependence of various companies to tech services to cut costs. But their services remain relevant with many still imposing work from home systems. This reliance on internet services could be good news for Microsoft, CNN Business noted.
Microsoft’s CEO told analysts: “Right now, what I would like us to focus on, in the interest of our long-term investors, is to say: How can we build this modern tech stack so that it can… help customers transform, be resilient, and help us get into new categories and build a strong position in those categories.”