Microsoft records a 13% year over year growth in Q4 revenue

Written by: Wajeeh Khan
July 22, 2020
  • Microsoft records a 13% year over year growth in revenue in the fiscal fourth quarter.
  • The tech firm announced several acquisitions in Q4 including Softomotive and Metaswitch.
  • Analysts estimate £28.18 billion in revenue for the U.S. tech giant in the fiscal Q1.

Microsoft (NASDAQ: MSFT) published its quarterly financial results that came in stronger than expected on Wednesday. The earnings report came only a day after the company introduced Customer Voice.

Shares of the company were reported about 2.5% down in after-hours trading on Wednesday. At £162 per share, Microsoft is currently just under 30% up year to date in the stock market after recovering from a low of £106.75 per share in March. Learn more about how do people make money on the stock market.

Microsoft’s Q4 financial results versus analysts’ estimates

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According to Refinitiv, experts had forecast the company to print £28.65 billion in revenue in the fourth quarter. Their estimate for earnings per share (EPS) was capped at £1.05 per share. In its report on Wednesday, Microsoft topped both estimates posting a higher £29.85 billion in revenue and £1.15 of earnings per share in Q4.

On a year over year basis, Microsoft noted a 13% growth in its quarterly revenue. The company’s earnings took a one-time pre-tax hit of £353 million that translates to a 3.92 pence per share in the recent quarter as it announced to have closed its physical retail stores.

According to the U.S. tech giant, its Intelligent Cloud unit saw a 17% increase in revenue on an annualised basis to £10.49 billion in the fourth quarter. This segment includes Windows Server, Azure public cloud, GitHub, SQL Server, and enterprise services. Analysts had anticipated a much lower £10.29 billion in revenue from Intelligent Cloud.

Microsoft’s revenue from Azure had jumped 59% in the third quarter. In Q4, the growth moderated to 47% instead. The Productivity and Business Processes segment generated £9.22 billion in revenue in the recent quarter that marks a 6% growth from last year but falls shy of the experts’ forecast of £9.35 billion. The unit includes Dynamics, Office, and LinkedIn.

Microsoft announced multiple acquisitions in Q4

Lastly, revenue came in 14% higher in Microsoft’s More Personal Computing segment at £10.13 billion and was reported stronger than the FactSet consensus of £9.01 billion. This segment includes Surface, Xbox, and Windows.

Microsoft announced multiple acquisitions in the fourth quarter, including Softomotive, Metaswitch, and CyberX. Waves Enterprise also announced to have partnered with Microsoft in a blockchain deal last week. For the first quarter, analysts have estimated £28.18 billion in revenue for Microsoft.

At the time of writing, the American multinational technology company has a market cap of £1.26 trillion and a price to earnings ratio of 35.26.