Microsoft announced Double-Digits Growth of Profit in 2021 Q2 Earning Results

Microsoft (NSDAQ: MSFT) announced 2021 Q2 earning results on January 26th, 2021. As a result, its revenue, operating income and net income increased by 17%, 29%, and 33%, respectively, showing double-digits growth in its performance (3 months, YoY). As for revenue of each segment, intelligent cloud segment showed the largest growth, which was +23% year-over-year.

Regarding revenue of each product, the Intelligent Cloud Azure recorded the highest growth of 50%, followed by game console and game contents of Xbox being 40% growth. Business AI service Dynamic 365 recorded 39% growth. According to Microsoft, revenue of most major products recorded double digits growth.

Game industry is expected to grow significantly due to spread of 5G communication and the associating digital transformation (DX). High growth rate of Xbox-related business indicates Microsoft’s promising future in the game industry. 

Also, since Microsoft is developing its SaaS business, it is expected that its gross margin as well as operating margin will be improved as its revenue grows. According to the announcement, its gross margin and operating margin were improved by 0.5 points and 3.9 points, respectively (3 months, YoY), expecting continuous improvement in its profitability. 

With good financial performance and high revenue growth, Watanabe & Brothers’ Investment expects continuous growth of Microsoft. 

Important Notice 

  1. Watanabe & Brothers’ Investment is holding shares of Microsoft Corporation.
  2. This report is provided solely for informational purpose and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell any specific products. 
  3. Any opinions or statements expressed in this report are based on the author’s personal and subjective views, and are not the official views of the organization to which the author belongs.  In addition, although we have done our best efforts in making accurate assessments on the original financial statements, we cannot guarantee any complete accuracy of this report. We do not guarantee either that any future forecasts referred to in this report will certainly be realized. Investment in listed stocks, ETFs, etc. should be carried out under the responsibility of each investor, and even if the investor who read this report suffers a loss due to investment activities, Watanabe & Brothers’  Investment is not responsible for any liability.
  4. This report was originally prepared in English, and translated into the other languages with plugin utilizing Google Translation API. We hereby notify that the translations are provided only for the sake of reference, and any opinions or statements in this report should be interpreted in original English. We ask any investors reading this report to refer to the original financial statements issued by the company.
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