Microsoft shares fell this week by 2.5% despite a strong fiscal Q4 driven by the pandemic's remote work and learning trends. Revenue was $38bn, increased 13%; operating income was $13.4bn and increased 8%.
In the revenue breakdown: Productivity and Business Processes $11.75bn; Intelligent Cloud, $13.37bn; More Personal Computing, $12.91bn.
Work and learn from home trends helped the Productivity and Business and Intelligent Cloud segments, though traditional licensing slowed and LinkedIn (+11% Y/Y in constant currency) was negatively impacted.
“The last five months have made it clear that tech intensity is the key to business resilience. Organizations that build their own digital capability will recover faster and emerge from this crisis stronger,” said Satya Nadella, CEO of Microsoft. “We are the only company with an integrated, modern technology stack – powered by cloud and AI and underpinned by security and compliance – to help every organization transform and reimagine how they meet customer needs.”
“Our commercial cloud surpassed $50 billion in annual revenue for the first time this year. And this quarter our Commercial bookings were better than expected, growing 12% year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “As we drive growth across the company, we remain committed to investing in long-term strategic opportunities.”
In the More Personal Computing segment, Windows OEM (+7%), Surface (+30%), and Xbox (+68%) benefited from the remote trends while Search ex-TAC (-17% Y/Y) was hit by the ad spend cuts.
Azure revenue was up 50% Y/Y in the quarter, decelerating from the 61% growth last quarter. Operating expenses were up 13% Y/Y including the $450m charge for closing the physical stores.
