(Reuters) – Microsoft Corp beat Wall Street estimates for Azure revenue growth on Tuesday, as the software giant continued to benefit from a global shift to working and learning from home.
The company’s shares, which gained about 41% in 2020 as one of the “stay-at-home” winners, rose 4% in extended trading.
The shift to work from home due to the COVID-19 pandemic has accelerated enterprises’ switch to cloud-based computing, benefiting Microsoft and rivals such as Amazon.com Inc’s cloud unit and Alphabet Inc’s Google Cloud.
Microsoft said revenue in its “Intelligent Cloud” segment rose 23% to $14.6 billion, with 50% growth in Azure. Analysts had expected a 41.4% growth in Azure, according to consensus data from Visible Alpha.
Revenue from its personal computing division, which includes Windows software and Xbox gaming consoles, rose 14% to $15.1 billion, driven by strong Xbox content and services growth, beating analysts’ estimates of $13.5 billion, according to IBES data from Refinitiv.
Microsoft in November released two new Xbox consoles, its most visible non-work and non-school brand, but the hardware proved difficult to find as a global semiconductor shortage contributed to tight stocks as many retailers.
(Reporting by Akanksha Rana in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila)