Microsoft Once More Demonstrated its Capabilities

Analysts and investors are closely watching tech giants including Microsoft. This week, the company reported better-than-expected earnings, as well as revenue, for the fiscal second quarter. Its revenue grew by 20% from a year earlier, compared with almost 22% growth in the first quarter. The tech giant’s income jumped by 21% to $18.77 billion.

The company founded by Paul Allen and Bill Gates had $36.77 billion in unearned revenue at the end of the year, below the StreetAccount consensus of $36.90 billion. According to Microsoft, it expects to recognize 45% of its $152 billion in remaining performance obligations over the next year. Notably, that percentage declined below 50% for the first time since at least 2017.

Microsoft and its results

In the fiscal third quarter, Microsoft expects revenue of $48.5 billion to $49.3 billion, topping the $48.233 billion Refinitiv consensus. The tech giant now expects full-year operating margins to widen slightly.

The company’s Intelligent Cloud segment, which contains the Azure Public cloud, and others generated $18.33 billion in revenue. Revenue from Azure and other cloud services grew by 46% in the fiscal second quarter. It is worth noting that the company does not disclose Azure revenue in dollars. 

Its revenue from the More Personal Computing segment, which includes Windows among others, totaled $17.47 billion. In the fourth quarter of 2021, sales of Windows licenses rose by 25%.

Microsoft’s revenue from Xbox hardware rose by 4%. In the previous quarter, its revenue jumped by 166%.