Unlike Facebook, which has a lot on its plate right now, Microsoft and Alphabet have successfully exceeded estimates and reported strong results in their Q1 2022 and Q3 2021 financial reports. Let us delve a bit deeper.
Microsoft Q1 2022
Microsoft reported that it pocketed $45.3 billion in revenue (an increase of 22%, the fastest growth since 2018) against estimates of $43.97 billion. Its net income grew by 48% to $20.5 billion (GAAP) and 24% to come at $17.2 billion (non-GAAP), while its operating income grew by 27% to come at $20.2 billion. Similarly, its diluted earnings per share (EPS) came at $2.71 GAAP and $2.27 non-GAAP (increasing by 49% and 25%, respectively).
After the fiscal first-quarter earnings were announced, Microsoft’s shares rose by 2% in extended trading on Tuesday.
“We delivered a strong start to the fiscal year with our Microsoft Cloud generating $20.7 billion in revenue for the quarter, up 36% year over year,” said Amy Hood, executive vice president and CFO of Microsoft. The company’s revenue in Productivity and Business Processes grew by 22% to come at $15 billion. This was led by the growth of Office 365 Commercial revenue, which spearheaded the increase of 18% in revenue from Office Commercial products and cloud services. LinkedIn revenue increased by 42% while Office Consumer products and cloud services revenue increased by 10%.
Microsoft’s Intelligent Cloud segment, consisting of the Azure public cloud, enterprise services, GitHub, SQL Server, System Center, Visual Studio, and Windows Server, clocked $16.96 billion in revenue. This is a year-over-year increase of 31% and exceeds the estimates of $16.51 billion. Additionally, Microsoft’s Azure and other cloud services grew 50% year-over-year in the quarter, exceeding estimates of 47%. Revenue in More Personal Computing was $13.3 billion and increased by 12%, while Surface revenue decreased by 17%.
Alphabet Q3 2021
Coming to Alphabet, Google’s parent company, it exceeded estimates of $63.45 billion and clocked $65.12 billion in revenue, a year-over-year increase of 41%. Its diluted earnings per share (EPS) came at $27.99, exceeding estimates of $23.48, while its operating income grew to come at $21.03 billion. Its net income came at $18.93 billion.
“Our consistent investments to support long-term growth are reflected in strong financial performance, with revenues of $65.1 billion in the quarter. We continued to deliver across our business by providing helpful and valuable experiences for both consumers and our partners,” said Ruth Porat, CFO of Alphabet and Google.
Revenue from YouTube increased exponentially to come at $7.20 billion, while Google Cloud reported $4.99 billion in revenue, narrowly missing the estimate of $5.07 billion. Operating loss narrowed to $644 million from $1.21 billion. Google’s Traffic Acquisition Costs (TAC) came at $11.50 against estimates of $11.16 billion.
Advertising from Google rose by 43% to come at $53.13 billion. Additionally, Google clocked $182 million in revenue from its Other Bets segment, while losses widened to $1.29 billion from $1.1 billion a year earlier.
