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.
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