Why Microsoft’s quarterly report caused great optimism

Microsoft Corp. (MSFT) has released a strong report for the second quarter of the fiscal year 2022, in which the company showed double-digit sales growth in all key segments. Investors took it positively. At the auction on January 26, MSFT stock rose by 2.85% to $ 296.71. In the quarter ended December 31, 2021, Microsoft’s revenue increased by 20% to $51.7 billion, operating profit increased by 24% to $22.2 billion. In addition, net profit increased by 21% to $18.8 billion, and earnings per share reached $2.48 (+22%). 

There was no single significant lousy news in the Microsoft report: sales are growing at a high rate, business profitability is improving. Microsoft successfully sells its cloud technologies into different segments, but there are positive dynamics. Thus, sales of Azure services and various cloud tools increased by 32% to $22.1 billion. Sales of the Windows operating system for OEMs also remain strong: growth was 25%. 

Sales in the Xbox video game ecosystem increased by 10%, and the social network for frame search LinkedIn increased sales of services by 37%. In addition, the number of subscribers in the Microsoft 365 software ecosystem has grown to 56.4 million. Microsoft returned $10.9 billion to shareholders through a buyback and dividends during the quarter. Microsoft management believes that the positive dynamics will continue in the current quarter, and profit and revenue growth may accelerate. 

Digital transformation continues, and Microsoft is one of the leaders in commercializing this trend. The company has a strong business in the IT segment for office and remote work. In addition, Microsoft has opportunities to enter new markets, including metaverse technologies.