Microsoft Q2 sales, profit beat Street estimates as cloud demand persists

SANFRANCISCO: Microsoft Corp. on Wednesday reported quarterly sales and profit that beat Wall Street expectations, driven by the first acceleration of Azure cloud computing revenue growth in eight quarters amid a pitched battle with Amazon.com Inc.’s cloud unit.

Microsoft sharezs hit an alltime high in after-hours trading. The r e s ul t s r e f l e c t e d t he approach of CEO Satya Nadella, who for five years has re-centred Microsoft around the cloud, renting out its computing power and technology to large businesses.

Microsoft said Azure, its primary competitor to Amazon’s cloud, grew 62% in the fiscal second quarter ended December 31, down from a 76% revenue growth rate the year before but up from 59% in the fiscal first quarter.

Microsoft’s chief financial officer, Amy Hood, said increased consumption of Azure services, which include offerings such as computing power to run applications and data storage services, drove the revenue growth.

“We did have good usage, which matters a ton to that number,” Hood told Reuters. “The core thing that we focused on - which is consumption growth - was quite good.”

Microsoft’s revenue and profit for the second quarter were $36.9 billion and $1.51 per share, respectively, compared with analyst estimates of $35.7 billion and $1.32 per share, according to IBES data from Refinitiv.

Microsoft forecast revenue of between $10.75 billion (8.2 billion pounds) and $11.15 billion for the unit containing Windows in the fiscal third quarter, a wider-thannormal forecast range that the company said was because of uncertainty surrounding the spread of the coronavirus in China. REUTERS