Microsoft revenue surges 21% to $46.2 bn on cloud boost

Microsoft revenue rose 21 percent to $46.2 billion, driven by Cloud demand, for the quarter ended June 30, 2021.
microsoft-cloud-for-enterprisesMicrosoft said revenue in its Intelligent Cloud segment rose 30 percent to $17.4 billion, with 51 percent growth in its Azure cloud-computing business, in the fourth quarter ended June 30.

The pandemic-driven shift to remote work has boosted consumer appetite for cloud-based computing, helping companies including Microsoft, Amazon.com’s cloud unit and Alphabet’s Google Cloud.

Microsoft’s revenue from personal computing, which includes Windows software and Xbox gaming consoles, rose 9 percent to $14.1 billion.

Microsoft Xbox content and services revenue dipped, suggesting that a pandemic-fueled gaming boom is beginning to wane, said Paolo Pescatore, an analyst at PP Foresight. The company must strengthen its presence in the home to better compete with rivals, he added.

Business Highlights

Revenue in Productivity and Business Processes was $14.7 billion and increased 25 percent, with the following business highlights:

  • Office Commercial products and cloud services revenue increased 20 percent driven by Office 365 Commercial revenue growth of 25 percent
  • Office Consumer products and cloud services revenue increased 18 percent and Microsoft 365 Consumer subscribers increased to 51.9 million
  • LinkedIn revenue increased 46 percent driven by Marketing Solutions growth of 97 percent
  • Dynamics products and cloud services revenue increased 33 percent driven by Dynamics 365 revenue growth of 49 percent

Revenue in Intelligent Cloud was $17.4 billion and increased 30 percent, with the following business highlights:

  • Server products and cloud services revenue increased 34 percent driven by Azure revenue growth of 51 percent

Revenue in More Personal Computing was $14.1 billion and increased 9 percent, with the following business highlights:

  • Windows OEM revenue decreased 3 percent
  • Windows Commercial products and cloud services revenue increased 20 percent
  • Xbox content and services revenue decreased 4 percent
  • Search advertising revenue excluding traffic acquisition costs increased 53 percent
  • Surface revenue decreased 20 percent

Some Microsoft hardware lines were affected by a shortage of components such as chips, said Kyle Vikstrom, director of Microsoft investor relations.

“We are seeing supply chain constraints that are impacting Windows OEM and Surface … and also impacting Xbox consoles,” she said.

The chip shortage could be contributing to Microsoft’s dip in Xbox content and services revenue, as constrained hardware sales lead to a weaker performance in services, said Daniel Ives of Wedbush Securities.

Microsoft also posted its most profitable quarter as demand soared for the software giant’s cloud-based services. Microsoft’s operating income was $19.1 billion (+42 percent), while net income was $16.5 billion (+47 percent) during the fourth quarter of fiscal 2021.