Microsoft beats quarterly revenue estimates

Microsoft Corp beat Wall Street profit and revenue expectations on Tuesday, benefiting from demand for the software giant’s cloud-based services, which shifted from the pandemic-triggered shift to a hybrid work model.

Shares were up less than 1% in after-hours trading.

Individuals and organizations have turned to Microsoft’s diverse products, such as Outlook and Team Workplace messaging apps, to make the company a pandemic winner for working and learning from home while switching.

Now as economies reopen, businesses are increasingly moving to a hybrid model, allowing employees to alternate work from the office and home. It’s also helping drive revenue for Windows products, said Brett Iverson, general manager of investor relations. “Strength in the commercial PC market drove Windows OEM revenue up 11%,” he told Reuters. The hybrid work trend has resulted in continued strength for Microsoft’s cloud services, including its flagship cloud offering, Azure.

Azure’s annualized growth of 46.0% in the third quarter was steady from the previous quarter and in line with estimates for 45.6% growth compiled by Visible Alpha. Nevertheless, Azure’s growth has shown a steady decline since FY20 when growth was in the 60% range.

Iversen said Azure Microsoft’s longer-term Azure contracts grew better than expected, though he didn’t provide specific numbers.

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Haris Anwar, Senior Analyst at Investing.com, said, “These figures show that customers continue to turn to Microsoft as they accelerate their shift to cloud computing and the current volatile economic environment has so far been the company’s main growth driver.” not affected.”

The company reported revenue of $49.36 billion in the third quarter, up from $41.7 billion a year ago. Analysts were expecting an average of $49.05 billion in revenue, according to Refinitiv IBES data.

Net income rose to $16.73 billion, or $2.22 per share, for the quarter ended March 31, from $15.46 billion, or $2.03 per share, a year ago. It topped the analyst target of $2.19.

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