Google and Microsoft quarterly settlement “Cloud led”

Google parent company Alphabet announced the settlement of accounts for the first quarter of 2021 on April 27 (local time). Alphabet’s total sales increased by 34% year-on-year to $55.3 billion, and net profit reached $17.9 billion, 2.6 times year-on-year.

In the first quarter settlement, Alphabet said it earned $55.3 billion in revenue, over 34% year-on-year, and net profit reached $17.9 billion, 2.6 times that of the previous year. In addition, earnings per share were $26.29, exceeding the monthly forecast.

The growth of the Google cloud business is also noticeable. First-quarter revenue was $4,447 billion, an increase of 46% to $2.78 billion year-on-year. Meanwhile, Google Cloud still suffers more losses, with operating losses of $97 million in the first quarter. However, operating loss in the same period last year was $1.73 billion, and the amount of losses is slowing significantly.

Ruth Porat, who served as CFO at Google and its parent company Alphabet, said he was pleased with the continued momentum of Google Cloud, with quarterly sales of $4 billion and opportunities in both Google Cloud Platform (GCP) and Google Workspace. Said that it reflects.

Despite significant revenue growth, the reason the cloud killing still loses is because Google continues to invest in cloud expansion. Forat said at its strategy meeting on the 27th that it is continuing to invest to build a cloud organization for long-term performance. He said he will continue to actively invest.

It is advertising revenue that supports Alphabet’s revenue. In the first quarter, Google search and other advertising revenue was $3.18 billion excluding YouTube. YouTube ad revenue reached $6 billion, an increase of 49% from $40.4 billion a year earlier. In addition, YouTube advertising revenue does not include subscription service fees such as YouTube Premium and YouTube TV.

According to Alphabet, YouTube boasts more than 2 billion login users per month. Total video viewing time per day is over 1 billion hours. Sundar Pichai, CEO of Google and Alphabet, said at a meeting on account settlement that YouTube Short, a short video service like TikTok, has grown dramatically from the end of 2020.

In addition, the loss of other bets in experimental divisions such as Waymo, which develops self-driving vehicles, Verily, a life science division, and Google Fiber, which establishes broadband Internet, was $1.15 billion. Its revenues are significantly exceeding $198 million.

CEO Sundar Pichai said last year people used Google search and many online services to get information, connect with someone, and have fun. Regardless, the company said it supports accelerating digital transformation. Meanwhile, Alphabet announced on April 23 that the board of directors had approved the redemption of shares of up to $50 billion.

If Google caught the eye in the cloud, Microsoft announced that its sales in the game division, including Xbox, increased significantly in its third quarter financial report in January and March of this year. Hardware revenue in the Xbox division increased by 232% compared to the same period last year.

Microsoft’s Xbox Series X/S, a home game console launched in November 2020, has not kept up with demand due to a shortage of semiconductors, and continues to sell out worldwide. Through this, the overall sales of the Xbox division increased by 50% year-on-year to $3.6 billion, and game hardware sales increased 232% year-on-year.

Its rival, the PlayStation 5, has been shown to sell at the fastest selling rate in the United States. Microsoft has not disclosed the exact sales volume of the Xbox Series X/S, but the Xbox Series X/S seems to be increasing sales smoothly, just like the PlayStation 5.

Microsoft also revealed that its Xbox content and service revenue increased by 34% thanks to third-party titles, Xbox Game Pass subscriptions, and its own titles. The Xbox Game Pass is a subscription game service that can be used not only on the Xbox Series X/S, but also on PCs, and is gaining popularity as a content to fully enjoy the game by paying a monthly fee.

In addition to Minecraft, which has surpassed Tetris and became the world’s best-selling game for game software, it is also focusing on the fidelity of the game titles it provides, such as acquiring Bethesda Softworks, which is famous for its Fallout series and the Elder Scrolls series, and its parent company, Zenimax Media.

Meanwhile, Microsoft reported an increase in sales and operating profit in this financial report, and reported that the number of users of Microsoft Teams, an online conferencing tool, increased from 75 million to 145 million due to the impact of the Corona 19 epidemic.

With the spread of Remote Work due to Corona 19, video conferencing apps including Zoom have grown significantly in 2020. Microsoft also announced that it had reached 115 million active users in 2020, expanding its online conferencing tools, including the ability to change background images.

In the midst of this, Microsoft Vice President Jeff Teper announced that Microsoft Teams has surpassed 145 million active users per day. As of the end of March 2021, the number of active users on Microsoft Teams 1 day before the start of the Corona 19 epidemic was 32 million, but increased to 75 million a few weeks after the Corona 19 epidemic. It doubles here, with 145 million active users.

According to the settlement report, Microsoft’s third-quarter revenue was $41.7 billion, 19% year-on-year, and operating profit $17 billion, up 31% year-on-year. The figure of 19% increase over the previous year is the largest growth rate since 2018. Net income was $15.5 billion in US accounting standards and $14.8 billion in non-GAAP.

In addition to Microsoft Teams, Microsoft’s growth recorded growth in a number of areas, including 50% increase in game sales and 12% increase in Surface sales. However, the most profitable growth was in the intelligent cloud sector, which was $15.1 billion, up 23% year-on-year. It is interpreted that the Azure cloud computing platform and related services have grown significantly.

Microsoft also announced running 1.3 billion Windows active devices. It is explained that the original target of 1 billion units broke through in May 2020 and is showing growth beyond expectations. Related information can be found here (Google , Microsoft).