Microsoft Q2 FY21 Earnings: Azure cloud services revenue grew 50%

Microsoft today announced FY21 Q2 earnings results. The revenue was $43.1 billion and the operating income was $17.9 billion. Revenue in Intelligent Cloud was $14.6 billion, and it increased 23%, with the following business highlights:

Microsoft reported that Server products and cloud services revenue increased 26% driven by Azure revenue growth of 50%. Enterprise services revenue increased 5%. Enterprise Mobility continues to grow, and its installed base increased to 163 million which is a 29% growth.

The gross margin dollars of this division grew 29%.

Microsoft’s Amy Hood provided the following guidance related to cloud business.

In commercial bookings, we have a growing Q3 expiry base and a low prior year comparable, so strong execution across our core annuity sales motions and increased commitment to our cloud platform should drive healthy growth. As a reminder, an increasing mix of large, long-term Azure contracts, which are more unpredictable in their timing, can drive quarterly volatility in the growth rates.

Commercial cloud gross margin percentage will increase by approximately 3 points year-over-year, again driven by the change in accounting estimate. Excluding this impact, continued improvement in Azure IaaS and PaaS gross margin will be offset by revenue mix shift to Azure and continued investments to support our customers’ success. We expect a sequential increase on a dollar basis to our capital expenditures as we continue to invest to meet growing global demand for our cloud services.

Source: Microsoft

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