Stay at Home Orders Helps Microsoft Beat Q3 Estimates

Tech Company Microsoft Corporation (MSFT) has announced its third quarter results for the period ending March 31, in the results Microsoft surpassed profit, revenue and sales estimates by Wall Street.

In the quarter, revenue of the company increased by 15% to $35.02 billion surpassing earlier Wall Street’s estimate of $33.66 billion.

Microsoft generated a net profit of $10.75 billion, or $1.40 per share, a value much higher than the $8.81 billion, or $1.14 per share the company registered in a similar quarter last year.

Revenue generated from the company’s cloud business Azure in the third quarter stood at $12.28 billion signifying a 27% increase in relation to what the unit generated in 2019. This also was above the $11.87 billion expected by analysts.

The company attributes this positive performance to stay at home orders issued to combat coronavirus pandemic.

Individuals have been working from their homes thereby Microsoft says in last three months it has been experiencing increasing demand in their online conferencing app, Team chat and Xbox gaming services.

During the pandemic period Microsoft recorded its all-time highest Xbox Live gaming active users which stood at a whopping 19 million active users on the gaming platform.

Video conferencing services have been on high demand, popular provider of such services Zoom Video Communications Inc. (ZM) has been experiencing security of user data issues on its Zoom app, a scenario which has resulted to a lawsuit.

This embarrassing situation has benefited Microsoft since some traffic has shifted to its Team collaboration software which now has a total of 75 million users.

Microsoft Chief Financial Officer Amy Hood, claims increase in number of users doesn’t necessarily translate to more revenue since many of users are new and probably on free trial mode.

In those instances, you also won’t see revenue, but seeing great usage obviously is terrific for us longer term if people want to convert that to a paying seat. While I’m really excited about the long-term potential for revenue, you won’t see it in this fiscal third quarter, or really even in Q4. It’s more about people being more and more engaged with Microsoft products,” said Hood.

 

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