Windows 10 was released in 2015. So, after 6 years, when Microsoft (NASDAQ: MSFT), one of the Big Five companies in the IT industry, announces a press event for June 24th, and that event is not about the new device, but to share the next version of Windows which is supposed to be a most significant Windows update of the last decade, that should dominate our headlines both before and after the announcement. And it does. It is the same for all major events, as it would be for any other company of the big five, Google (NASDAQ: GOOG), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), and Facebook (NASDAQ: FB). And even without the new Windows version, Microsoft’s share price had an impressive fiscal 2021. The price has increased 19% this year, out of which 6% in the last month alone.

Achieved vs estimated vs historic revenues and profits

Last quarter estimates were exceeded, as well as guidance figures. The company achieved revenues of $41.71 billion (the analysts expected $41.03), which was a 19% growth compared to the same quarter last year. That was more than the company itself predicted. Adjusted earnings per share were $1.95, and that was also above the expected $1.78. Microsoft’s Azure cloud, a direct competitor to the market leader AMS (Amazon Web Services), grew an incredible 50%, and that was also above the analysts’ expectations (46%). The whole Intelligent Cloud segment, consisting of Windows Server, SQL Server, Azure, Visual Studio, GitHub, and Enterprise Services grew 23% year over year. The Productivity and Business Processes segment (Office, Dynamics, and LinkedIn) were up 15%, generating $13.55 billion in revenue. And the segment holding Windows, gaming, devices, and search (More Personal Computing unit) was also up by 19%. This is not a surprise since the general demand for PC units is booming. The overall number of shipped units to the sellers and vendors is higher by 32% compared to the year-ago, so there are currently over 1.3 billion Windows 10 active devices.

Margins movements

Since the major revenue growth has been made in the cloud segment, that means the profit & loss structure has changed. And we can see that in the narrowed operating margin. The gross margin of the most commercial cloud products like Azure, Office 365, Dynamics 365, and LinkedIn narrowed to 70% (from 71%). The margin for the Intelligent Cloud segment also decreased to 42.5% (from 44.5%). So, the overall operating margin decreased to 40.9% (from 41.6%). These figures are important to the investors who are hoping to see better profitability from Azure and related products.

Which font will replace our favorite Calibri?

Big happenings like the new version of Windows are good opportunities to make other changes, like presenting a successor to Calibri, a font which we all used at least since when it became Word’s and Excel’s default in 2007. It is time to evolve and move forward, and Microsoft announced five new fonts, and one will be picked as Calibri’s successor.

Outlook

While many companies’ businesses were threatened by the Covid-19 pandemic, most IT companies were better insulated, as their products were a solution to the situation. Microsoft was already a well-established company, one of the top five, and it managed to use that train to achieve historic results during the last year. Other IT companies, like Zoom (NASDAQ: ZM) used the pandemic wave to build their name and became the synonym for video conferencing. Now, as the Covid-19 measures are getting softer and people are returning to offices and schools, we will have to see which companies will maintain their business volumes. Which IT solution we will continue to use, and which will be replaced with a face-to-face “alternative”… we will have to wait and see.

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