Microsoft releases strong Q2 results based on cloud, gaming

Microsoft has released its earnings for the second quarter of the 2020 financial year, with strong growth in its 'Intelligent Cloud' business area.

In a transcript of the earnings call, Microsoft’s CFO Amy Hood summarised the results, saying: ”This quarter, revenue was $43.1 billion, up 17% and 15% in constant currency. Earnings per share was $2.03, increasing 34% and 31% in constant currency. Across our business, results exceeded expectations, driven by strong execution and improving trends across industries, customer segments and geographical markets, resulting in double-digit top and bottom line growth.”

Changing habits

Some of the strongest performing parts of Microsoft’s business were all related to sectors that have boomed during the pandemic - namely increased PC sales, cloud services and gaming.

In a press release, Satya Nadella, chief executive officer of Microsoft, said: ““What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry. Building their own digital capability is the new currency driving every organization’s resilience and growth. Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform.”

Gaming and the cloud

In the past year, Microsoft has launched its next generation Xbox Series X video game console and acquired veteran video game developer Bethesda. Its renewed impetus in the sector has paid dividends, with Xbox content and services revenue increasing 40%.

The commercial cloud part of its business, which in recent times has been the main driver of growth, was no slouch either, achieving $16bn in revenue, up 34% year over year. “What we are witnessing is the dawn of a second wave of digital transformation sweeping every company and every industry,” said Nadella. “Digital capability is key to both resilience and growth. [...] Microsoft is powering the shift with the world's largest and most comprehensive cloud platform.”

(Image: Microsoft)