Microsoft's Earnings Continue to Ride Pandemic-Fueled Demand for Cloud, Videogaming

By Aaron Tilley

Microsoft Corp. posted another quarter of strong earnings fueled by pandemic-era demand for cloud-computing services and videogaming.

The software company on Tuesday said sales rose 12% to $37.2 billion, generating a net profit of $13.9 billion in the first quarter of its fiscal year. The results surpassed Wall Street expectations on revenue and profit for the quarter ending in September.

Revenue from Azure, the company's massive cloud-computing service that has underpinned its financial success in recent years, increased 48% from the year-ago period. Sales from Commercial Cloud, a broader metric of its cloud business, reached $15.2 billion, compared with $11.6 billion in the year-ago quarter.

"Demand for our cloud offerings drove a strong start to the fiscal year, " Microsoft Chief Financial Officer Amy Hood said.

Microsoft's personal computing business -- which includes licensing revenue from PC sales, the Xbox gaming platform and Surface laptops -- saw sales advance 6% to $11.8 billion. The gaming content business saw a 30% jump in sales over the previous year. The business is also expected to get a boost later this year with the release of the new Xbox Series X gaming console.

Write to Aaron Tilley at aaron.tilley@wsj.com

(END) Dow Jones Newswires

October 27, 2020 16:52 ET (20:52 GMT)

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