Microsoft Corp. (NASDAQ:MSFT) posted better-than-expected earnings as its cloud computing business and Teams messaging and collaboration software drove the company’s results higher.
The pandemic-driven shift to working from home and online learning helped Microsoft’s first quarter 2021 results beat analyst targets. Covid-19 has sped up a move toward cloud-based computing, helping companies such as Microsoft, Amazon.com (NASDAQ:AMZN) and Alphabet Inc.'s Google (NASDAQ:GOOGL).
For Microsoft, the move to work from home has also boosted demand for its Windows operating systems for laptops and its Xbox gaming services as families work, learn and play at home, leading to a profit that was 30% above expectations.
Daily users of its Teams virtual collaboration software have risen to 115 million from 75 million in April, the company said. Revenue growth for Azure, the company’s flagship cloud computing business, was 48%, up one percentage point from the previous quarter and ahead of Wall Street estimates of 43.45%, according to consensus data from Visible Alpha.
Microsoft’s commercial cloud gross margins - a measure of the profitability of its sales to large businesses - was 71%, compared with 66% a year earlier. Microsoft said revenue in its "Intelligent Cloud" segment rose 20% to $13 billion in the most recent quarter. Revenue from its personal computing division, which includes Windows software and Xbox gaming consoles, rose 6% to $11.8 billion.
