Microsoft Earnings Jump on Pandemic-Driven Cloud, Videogaming Demand

Quarterly sales advance 17% to record $43.1 billion

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By

Aaron Tilley

Updated Jan. 26, 2021 5:19 pm ET

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Microsoft Corp. posted record quarterly sales underpinned by pandemic-fueled demand for videogaming and accelerated adoption of its cloud-computing services as businesses continued to embrace new digital tools during the health crisis.

The remote-work era has been a boon for Microsoft. In addition to its videogaming and cloud-computing products, the company has notched strong sales of its Surface laptops as people bought devices to facilitate working from home and distance learning. The use of Microsoft’s Teams workplace-collaboration software, which has been a priority for Chief Executive Satya Nadella, has jumped during the pandemic with its offering of such services as text chat and videoconferencing.

“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,” Mr. Nadella said Tuesday.

The software giant said its fiscal second-quarter net income rose more than 30% to $15.5 billion. Sales advanced 17% to $43.1 billion. Those figures beat Wall Street’s expectation of net income of $12.6 billion and sales of $40.2 billion, according to FactSet.

Microsoft shares were ahead 4% in after-hours trading. The stock gained more than 40% over the past year.

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