Microsoft stock jumps after reporting cloud and Windows revenue that beat Wall Street estimates

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Microsoft stock jumps after reporting cloud and Windows revenue that beat Wall Street estimates
Satya Nadella is the CEO of Microsoft.Stephen Brashear/Getty Images
  • Microsoft reported quarterly revenue of $43.1 billion on Tuesday afternoon.
  • Microsoft's stock price was up nearly 4% in after-hours trading after the release.
  • Microsoft doesn't report revenue for its Azure cloud, but said revenue growth was up 50%.

Microsoft reported earnings for the second quarter of its fiscal year after the market closed on Tuesday, handily beating analyst expectations with $43.1 billion in revenue, up 17% from the same quarter last year.

Here's what the company reported:

  • Revenue: $43.1 billion, versus Wall Street expectations of $40.12 billion, according to Zacks. That's up from $36.9 billion during the same quarter last year.
  • Earnings: $2.03 per share vs. Wall Street expectations of $1.64 per share.
  • Net income: $15.5 billion, up 33%.

Microsoft's stock price was up as much as over 5% in after-hours trading immediately following the release, to around $242 per share.

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Microsoft reported $14.6 billion in quarterly revenue, up 23% compared to the same quarter last year, for its "Intelligent Cloud" business, which includes Azure, server products, and enterprise and cloud services. Microsoft doesn't report revenue figures for Azure itself, but said revenue grew 50% year over year.

The "Productivity and Business Processes" segment - which includes the Teams chat app, Office products for businesses and customers, LinkedIn revenue and Dynamics products and cloud services - reached $13.4 billion for the quarter, up 13%. Office 365 revenue from business customers included 21% and Microsoft said it now has 47.5 million subscribers for its Microsoft 365 Consumer product.

And Microsoft reported revenue for the business unit it calls "More Personal Computing," which includes Windows, search, Xbox and Surface, was $15.1 billion for the quarter, up 14%. Xbox revenue increased 40%, which it attributed in part to an 86% surge in gaming hardware revenue following the release of its new Xbox Series X and Xbox Series S consoles. Revenue for its Surface hardware line, including the Surface Pro tablet/laptop hybrid, topped $2 billion in the quarter for the first time.

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Microsoft's overall commercial cloud business - which includes its Microsoft Azure cloud computing business, the Microsoft 365 suite of cloud software applications and other services - reached $16.7 billion in sales for the quarter, up 34% compared to the same quarter last year.

Analysts typically watch for the continued growth of Microsoft's cloud business, but the Microsoft Teams chat app is also growing in importance for company leaders and investors alike. Microsoft during its last earnings release in October said Teams daily active users had reached 115 million, but so far has not provided an update.

Are you a Microsoft employee or do you have insight to share? Contact reporter Ashley Stewart via encrypted messaging app Signal (+1-425-344-8242) or email (astewart@businessinsider.com).

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