Microsoft Teams sees 50pc surge in users during successful quarter

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Despite facing strong competition from the likes of Zoom and Google when it comes to remote working tools, Microsoft Teams has seen a surge in active users during the Covid-19 pandemic. In addition to posting its first quarterly earnings report for Q1 2021, Microsoft CEO Satya Nadella said that Teams now has 115m daily active users, up 50pc on the 75m announced almost six months ago.

The platform received a number of updates in recent months, including a ‘virtual commute’ offering at the start and end of your work day to allow you to help the user gather their thoughts in a similar way to regular commuting.

Financially, Microsoft’s latest quarter see strong returns with revenue of $37.2bn and a net income of $13.9bn. This was a 12pc and 30pc increase, respectively, on the previous quarter.

Much of the growth in earnings was tied to its cloud offerings now in greater demand as a result of the pandemic. Server products and cloud services revenue increased 22pc, driven by Azure revenue growth of 48pc.

Declining hardware

The company’s gaming business also performed well, with Xbox content and services revenue increasing by 30pc. However, its search advertising revenue, minus traffic acquisition costs, was down by 10pc and revenue for Windows OEM down 5pc.

“The next decade of economic performance for every business will be defined by the speed of their digital transformation,” Nadella said. “We are innovating across our full modern tech stack to help our customers in every industry improve time to value, increase agility, and reduce costs.”

Microsoft’s CFO, Amy Hood, said that with its commercial cloud revenue generating $15.2bn – up 31pc year-on-year – the company will “continue to invest against the significant opportunity ahead of us to drive long-term growth”.

Hood added in a call with investors said there has been “very strong demand” for the soon-to-be-launched Xbox Series X and S consoles. This will materialise as “supply constrained hardware revenue growth of approximately 40pc”, she added.

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