Microsoft Smashes in Fiscal Second Quarter Financial Report

Tech giant Microsoft reported an earnings and revenue beat this week and also provided better than expected guidance.

The company reported second quarter financial results on Wednesday and saw its shares soar 4% higher in after-hours trading.

The company’s revenue growth came in a staggering 62%, higher than what some analysts had predicted. Goldman Sachs analysts had predicted growth of 58%.

“Our partner conversations this quarter continued to emphasize Azure’s momentum, which is enabling the company to significantly outpace the overall market’s growth,” Goldman Sachs analysts led by Heather Bellini wrote in note earlier in the week. “Partners commented this quarter that they have seen Azure investments continue to increase significantly, as well an effective enterprise sales force focused on driving Azure adoption and usage.”

For the quarter, Microsoft reported earnings per share, excluding certain items, of $1.51. This was compared to the $1.32 that was expected by analysts per Refinitiv.

Revenue at $36.91 billion was also ahead of the $35.68 billion that was expected by analysts per Refinitiv. On a year-over-year basis revenue rose 14% in the quarter.

Satya Nadella, CEO of the company remarked, “It was another strong quarter with double-digit top and bottom-line growth driven by the strength of our commercial cloud. Stepping back from the quarter and reflecting more broadly on the next decade, the defining secular trend will be the increasing rate of digitization of people, places, and things. This malleable power of software will drive productivity growth across all industries, leading to more inclusive economic growth far beyond the domains of consumer tech today.”

Looking ahead, Amy Hood, Microsoft’s finance chief, told analysts Microsoft expects $34.1 billion to $34.9 billion in fiscal third-quarter revenue.

According to Hood, for the full 2020 fiscal year, which ends on June 30, Microsoft will increase its operating margin by 2 percentage points.

Shares of Microsoft have climbed 63% higher in the last year.

Disclaimer: We have no position in Microsoft Corporation (NASDAQ: MSFT) and have not been compensated for this article.