Microsoft posts $35B in revenue says ‘minimal net impact’ from COVID-19 in quarter

Amid the pandemic which has toppled the economies and caused a crisis for multinational organisations across the world, Microsoft Corporation, the global tech giant on Monday announced the result for the quarter ended March 31, 2020, saying that it has had a 'minimal impact' of COVID-19 on the company's revenue.

“We’ve seen two years’ worth of digital transformation in two months. From remote teamwork and learning to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything,” said Satya Nadella, chief executive officer of Microsoft.

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As compared to the corresponding period of last fiscal year, Microsoft has posted revenues as follows:

• Revenue was $35.0 billion, an increase of 15%
• Operating income was $13.0 billion, increased by 25%
• Net income was $10.8 billion, increased by 22%
• Diluted earnings per share were $1.40, an increase of 23%

Amid the pandemic when people are compelled to stay at home and resort to the concept of 'work from home', Microsoft saw a surge in the use of cloud-based platforms. Revenue from gaming business also increased for Microsoft amid the lockdown restrictions imposed across the world.  

“In this dynamic environment, our sales teams and partners executed a solid third quarter, with Commercial Cloud revenue-generating $13.3 billion, up 39% year over year," said Amy Hood, executive vice president and chief financial officer of Microsoft.

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"In the Productivity and Business Processes and Intelligent Cloud segments, cloud usage increased, particularly in Microsoft 365 including Teams, Azure, Windows Virtual Desktop, advanced security solutions, and Power Platform, as customers shifted to work and learn from home. In the final weeks of the quarter, there was a slowdown in transactional licensing, particularly in small and medium businesses, and a reduction in advertising spend in LinkedIn," the statement by Microsoft read.

"In the More Personal Computing segment, Windows OEM and Surface benefited from increased demand to support remote work and learn scenarios, offset in part by supply chain constraints in China that improved late in the quarter. Gaming benefited from increased engagement following stay-at-home guidelines. The search was negatively impacted by reductions in advertising spend, particularly in the industries most impacted by COVID-19. The effects of COVID-19 may not be fully reflected in the financial results until future periods," the statement added.