Microsoft said its total revenue rose 13 percent to $38.03 billion in the quarter that ended June 30.
Microsoft’s revenue went up 15 percent in the prior quarter, which saw less impact from the coronavirus pandemic.
The revenue growth was fuelled by its More Personal Computing unit as more people used its products to work on Windows PCs and play games on Xboxes during lockdowns. Revenue from the unit rose 14 percent to $12.9 billion.
Revenue in Microsoft’s Intelligent Cloud segment rose 17 percent to $13.4 billion, with 47 percent growth in the Azure component, which includes essential computing and storage services.
Microsoft’s Intelligent Cloud business segment includes the Azure public cloud, Windows Server, SQL Server, GitHub and enterprise services.
Microsoft revealed that Azure revenue growth slowed to 47 percent from 59 percent in the previous quarter. Microsoft does not disclose Azure revenue, but did say its commercial cloud business surpassed $50 billion in revenue for the fiscal year.
Amazon.com’s Amazon Web Services (AWS) posted revenue growth of 33 percent to $10.2 billion for the quarter ended March 31. IBM, another Microsoft rival, said its total revenue fell 5.4 percent to $18.1 billion. The cloud revenue of IBM rose 30 percent to $6.3 billion.
Beyond Azure, Microsoft’s results showed how the novel coronavirus is both helping and hurting Microsoft.
The Productivity and Business Processes unit, which contains Office, Dynamics and LinkedIn, rose 6 percent to $11.75 billion in revenue.
Businesses are investing in cloud technology for remote work, and the video game Minecraft scored a record 132 million monthly active users as families worked and played from home.
Microsoft Chief Financial Officer Amy Hood said 12 percent commercial bookings growth, which reflects corporate contracts for future software and services, was roughly unchanged from the previous quarter. The figure signals customers are keeping long-term technology spending plans intact.
“Our strong position in the cloud has allowed us to have good results and support our customers as they work on the next couple of years of digital transformation,” Amy Hood told Reuters.
Microsoft said its professional networking site, LinkedIn, was hurt by the weak job market and advertising spending cuts. LinkedIn’s revenue grew 10 percent, the slowest growth since 2016 as Microsoft closed the $27 billion acquisition, given the weaker job market and less spending on advertising.
Microsoft’s capital expenditures came to $5.8 billion, almost double what they were three years ago as the company looks to expand the infrastructure to deliver Azure and its own online services.
The company’s More Personal Computing unit, including Windows, search, Surface and Xbox, rose 14 percent to $12.91 billion in quarterly revenue.
Sales of licenses for commercial Windows devices shrank 4 percent, the slowest growth since 2016, while licenses for consumer devices accelerated to 34 percent after falling 10 percent one quarter earlier.
Microsoft called for $35.61 billion in revenue for the fiscal first quarter, implying 8 percent revenue growth. The company is changing its accounting to reflect the useful life of server equipment, raising it to four years, and that adjustment will benefit operating income for the full 2021 fiscal year by $2.7 billion, Amy Hood said.
Amazon Web Services, the leader in the public cloud market, announced a similar shift in January, CNBC reported.