Microsoft beats quarterly revenue estimates on cloud strength

While revenue beat expectations it failed to turn around the negative market sentiment that has dragged down stocks. Microsoft shares were down about 3% in after-hours trading.

Reuters

January 26, 2022 / 08:14 IST

Satya Nadella, CEO, Microsoft

Microsoft Corp exceeded analysts' expectations for second-quarter revenue on January 25, propelled by strong demand for its cloud-based services from more businesses migrating to hybrid work models due to the pandemic.

While revenue beat expectations it failed to turn around the negative market sentiment that has dragged down stocks. Microsoft shares were down about 3% in after-hours trading.

Microsoft has become one of the most valuable companies in the world by betting heavily on corporate software and services, especially its cloud services and the movement to the Web of its Outlook email and calendar software, known as Office 365.

The switch to working and learning from home during the pandemic also attracted more users to Microsoft's office communication software and services such as Teams and Office 365. And demand for cloud services from Microsoft and rivals Amazon.com Inc and Alphabet Inc surged as the pandemic outbreak accelerated a shift online.

Revenue from Microsoft's biggest segment, which offers cloud services and includes Azure, its flagship cloud offering, rose 26%, while the business that houses its Office 365 services increased 19% in the quarter.

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