Microsoft Cloud Computing Service Boosts Revenue Growth

Microsoft Corporation, the leading global developer of computer software and hardware systems and applications, released its results for the fourth quarter of its financial year for the period ended June 30, 2021.

Revenue

Microsoft swooped in massive revenue, thanks to Azure revenue growth of 51% year-on-year. Microsoft Azure is a cloud computing service created by Microsoft for building, testing, deploying and managing applications and services through Microsoft-managed data centres. Total revenue for Microsoft stood at $46.2 billion, representing a 21% increase compared to 2020.

Revenue Drivers

The revenue generated from Microsoft’s three business segments are as follows:

Productivity and Business Processes — $14.7 billion. This represents an increase of. 25% compared with 2020.

Intelligent Cloud — $17.4 billion. This represents an increase of 30% compared with 2020.

More Personal Computing — $14.1 billion. This represents an increase of 9% when compared with 2020.

How Have The Shares Preformed?

The company rewarded shareholders through a $6.2 billion share buy back and a $0.56 dividend per share this quarter. In total, $10.4 billion was returned to shareholders. This represents an increase of 16% compared to 2020.

Share repurchases refer to when a company buys back its own previously issued shares from the public.

Dividends refer to payments made to shareholders by a company.

Microsoft shares have gained 28.8% since the beginning of the year. Compared to the broader market, the S&P 500 and NASDAQ have gained 17.2% and 14.6% respectively during the same period.

Outlook

The company’s outlook for the next quarter (Q1 2022) expects a slowing revenue growth across most business segments due to the impact of the Covid-19. Although the effect of the pandemic is gradually fading away, its impact is still being felt. As the company moves into the next quarter, costs saved during the Covid-19 pandemic are expected to rise. This is due to the gradual removal of movement restrictions globally .

Do you have differing opinions concerning next quarter’s results? Leave a comment below.

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