Microsoft Q4 2021 Earnings Report Recap

MSFT beat on earnings and revenue

Key Takeaways

  • Azure revenue grew 51% year over year, beating analysts' expectations.
  • Azure is Microsoft's cloud computing platform, which offers a number tools and services to meet various computing needs of developers.
  • Microsoft's cloud platform has benefitted from the acceleration of the adoption of cloud services triggered by the pandemic.
Microsoft Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $2.17 $1.91
Revenue Beat $46.2B $44.3B
YOY Growth in Microsoft Azure Revenue Beat  51% 43.1%

Source: Predictions based on analysts' consensus from Visible Alpha

Microsoft (MSFT) Financial Results: Analysis

Microsoft Corporation (MSFT) reported Q4 FY 2021 earnings that beat analyst expectations. Adjusted earnings per share (EPS) came in well above what analysts had forecast, rising 48.6% year over year (YOY). Revenue also surpassed analyst estimates, up 21.3% compared to the year-ago quarter. Microsoft's Azure cloud revenue grew 51% YOY, surpassing expectations. Microsoft does not disclose Azure revenue in dollars in its earnings report. The company's shares fell as much as 3% in after-hours trading. Over the past year, Microsoft's shares have provided a total return of 42.1%, above the S&P 500's total return of 35.9%.

Note that Microsoft's 2021 fiscal year ended June 30, 2021. Its current earnings report is thus for its fiscal fourth quarter, which coincides with the second quarter of the calendar year.

MSFT Azure Revenue

Azure is Microsoft's cloud computing platform, which offers developers, IT professionals, and enterprises a suite of tools and services that can be used for networking, storage, mobile and web application services, artificial intelligence (AI), Internet of Things (IoT), and a range of other computing needs. It captured an approximately 20% share of the $150 billion global cloud market as of the end of Q1 2021. Microsoft's Azure is second only to, Inc.'s (AMZN) Amazon Web Services in terms of global cloud market share.

Microsoft's Azure revenue rose 51% YOY, accelerating slightly from last quarter's pace. The company said that the rise in Azure revenue was due to growth in consumption-based services. Microsoft has been one of the big beneficiaries of companies turning to services that run on the cloud during the COVID-19 pandemic.

Microsoft Earnings Call Recap 

Azure’s sales increase of 51% fell short of some investors' expectations because the growth was partially driven by currency fluctuations. The growth rate slows to 45% without that factor, representing a slowdown from the prior period. During a conference call, Microsoft management made sales and margin forecasts that reassured investors about the company's outlook, pushing the shares higher in extended trading after falling following the report.

Microsoft's next earnings report (for Q1 FY 2022) is estimated to be released on Oct. 25, 2021.

Article Sources
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  2. Visible Alpha. "Financial Data." Accessed July 22, 2021.

  3. CNBC. "Microsoft posts big earnings beat, but Windows revenue from device makers falls 3%." Accessed July 27, 2021.

  4. TradingView. "Price Chart: MSFT and S&P 500." Accessed July 27, 2021.

  5. Microsoft Corp. "Form 10-K for the fiscal year ended June 30, 2020," Page 9. Accessed July 27, 2021.

  6. Statista. "Amazon Leads $150-Billion Cloud Market." Accessed July 27, 2021.

  7. Bloomberg. "Microsoft Tops Estimates; Azure Growth Trend Spooks Investors." Accessed July 28, 2021.

  8. Yahoo! Finance. "Earnings Calendar: MSFT." Accessed July 27, 2021.

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