Soaring demand for Microsoft’s cloud-based services resulted in a strong fiscal 2022 first quarter for the computing giant. The company’s cloud division generated $20.7 billion in revenue, which was an increase of 36% year-over-year.
Microsoft attributed the surge in its cloud business to more enterprises making their digital transformation as the Covid-19 pandemic forced employers to move to a hybrid work environment.
In addition, Microsoft Azure, which is part of the company’s Intelligent Cloud segment, rose 31% to $17 billion in revenue, which was higher than analyst expectations.
During the company’s earnings call with investors, Microsoft CEO Satya Nadella referred to Azure as “the world’s computer,” and said that the company has more data center regions than any other provider, which enables it to deliver faster access to cloud services.
He also mentioned the company’s high-profile deals with wireless operators around the globe, including AT&T, Verizon, Telefonica, BT, Testra and Singtel, as part of its growth trajectory, noting that Microsoft is working with those operators to deliver ultra-low latency compute power and storage to the network and the enterprise edge.
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The company’s overall revenue for its fiscal 2022 first quarter was $45.3 billion, which was up 22% from the same period in the previous year. Net income was $20.5 billion GAAP and $17.2 billion non-GAAP, an increase of 48% and 24% respectively.
Capital expenditures for the fiscal 2022 first quarter were $7.4 billion. The company noted that its capital investments are primarily focused on new data center regions and the expansion of existing regions.
But Microsoft isn’t the only cloud provider experiencing a big jump in its revenues. Alphabet released its third quarter 2021 earnings and its Google Cloud division reported $5 billion in revenue, an increase of 45% from the same period in the previous year.
Thwarting cyberattacks
Besides the cloud sector, Microsoft also noted an increase in its security business. Nadella said that the company’s security platform analyzes more than 24 trillion signals across email, endpoints, and identifies every day and has prevented more than 70 billion cyberattacks over the past year. He said Microsoft has 650,000 customers using its security products, which is an increase of 50% year-over-year.
Microsoft executives also provided some guidance for the fiscal 2022 second quarter. The company expects its Intelligent Cloud division revenue to continue to be strong in the second quarter — between $18.1 billion and $18.35 billion — and most of that will be driven by Azure, which does have some variability in its revenue depending upon contracts with customers.