Alphabet and Microsoft have both exceeded analysts’ expectations for their Q2 2021 earnings, in part thanks to Google Cloud and Microsoft Azure growth.
Microsoft, whose fiscal Q4 corresponds to the second calendar quarter of the year, posted revenues of $46.2 billion (£33.1bn) in the period, a growth of 21% compared to the year-ago quarter.
Meanwhile, Alphabet reported an impressive 62% revenue increase from $38.3bn (£27.4bn) in Q2 2020 to $61.9bn (£44.3bn) in the same quarter this year.
For Microsoft, its Azure cloud platform was a major facilitator of its growth, boasting a 51% revenue increase in this quarter compared to last year. It marks Azure’s best growth result since January to April 2020.
On Microsoft’s earnings conference call, the company’s CFO, Amy Hood, said: “In our commercial business, healthy demand for our differentiated hybrid and cloud offering, as well as increased long-term commitment to our platform drove significant growth in the number of $10 million-plus Azure and Microsoft 365 contracts.”
Microsoft closed out at the end of June with a net income increase and diluted earnings per share of just under 50%, nearly 20% more than Wall Street analysts’ predictions.
While Alphabet’s successful quarter was driven largely by search engine and advertising growth, the spotlight was on Google Cloud as the underperforming third largest cloud provider in the industry.
Google Cloud revenue grew from $3bn (£2.1bn) in the second quarter of 2020 to $4.6bn (£3.3bn) in the same time frame this year. Alongside this, Google Cloud’s operating loss dropped to $591m (£423m) from $1.43bn (£1bn), marking a substantial increase in profits.
Ruth Porat, CFO for Alphabet and Google Cloud, said: “We remain focused on revenue growth and are pleased with the trends across cloud, we will continue to invest aggressively given the opportunity we see.”
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