Microsoft Q4 2021 Earnings Report: Revenue Soars with Azure Growth at 51%

Microsoft (MSFT) delivered impressive Q4 2021 earnings, outperforming market forecasts on both revenue and earnings per share.

Highlights

• Azure cloud platform revenue surged 51% year-over-year, exceeding analyst predictions.
• Azure provides a comprehensive suite of cloud services for developers, IT professionals, and enterprises, supporting AI, IoT, networking, storage, and more.
• The pandemic accelerated cloud adoption, significantly benefiting Microsoft's cloud business.

Source: Analyst consensus data from Visible Alpha

In-Depth Analysis of Microsoft’s Q4 2021 Financial Performance

Microsoft Corporation reported a strong finish to its fiscal year 2021 with Q4 earnings that beat expectations. Adjusted earnings per share rose 48.6% year-over-year, while revenue climbed 21.3% compared to the same quarter last year. Azure revenue growth topped 51% annually, underscoring the platform's expanding market presence. Although Microsoft does not disclose exact Azure revenue figures, the company’s shares experienced a slight dip of up to 3% in after-hours trading. Over the last 12 months, MSFT stock has delivered a total return of 42.1%, outperforming the S&P 500’s 35.9% gain.

Note: Microsoft's fiscal year 2021 ended on June 30, 2021, so this Q4 report corresponds to the calendar year's second quarter.

Microsoft Azure: Cloud Market Leadership

Azure stands as Microsoft’s flagship cloud computing platform, offering a broad range of services including AI, IoT, mobile and web app development, networking, and storage solutions. By Q1 2021, Azure commanded about 20% of the $150 billion global cloud market, ranking second only to Amazon Web Services.

Azure’s revenue growth accelerated slightly this quarter, driven mainly by increased consumption-based services. The pandemic-induced shift to cloud computing has positioned Microsoft as a key beneficiary in this expanding market.

Insights from Microsoft’s Earnings Call

While the 51% growth in Azure revenue was impressive, some investors noted that currency fluctuations contributed to the figure, which adjusts to a 45% increase when excluding this effect — indicating a slight deceleration compared to previous periods. Microsoft’s management provided optimistic sales and margin forecasts during the earnings call, reassuring investors and boosting after-hours trading despite initial share declines.

Microsoft’s next earnings update for Q1 FY 2022 is anticipated on October 25, 2021.

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