Microsoft posted 17 percent increase in its revenue to $43.1 billion for the quarter ended December 31, 2020.
“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,” said Microsoft CEO Satya Nadella.
Revenue in Intelligent Cloud was $14.6 billion and increased 23 percent.
Server products and cloud services revenue increased 26 percent driven by Azure revenue growth of 50 percent.
Commercial cloud revenue rose 34 percent year over year to $16.7 billion.
“We continue to benefit from our investments in strategic, high-growth areas,” said Amy Hood, executive vice president and CFO, Microsoft.
The company said that the revenue in Productivity and Business Processes was $13.4 billion and increased 13 percent.
Office Commercial products and cloud services revenue increased 11 percent driven by Office 365 Commercial revenue growth of 21 percent.
LinkedIn revenue increased 23 percent while Dynamics products and cloud services revenue increased 21 percent, driven by Dynamics 365 revenue growth of 39 percent.
Revenue in More Personal Computing was $15.1 billion and increased 14 percent.
Xbox content and services revenue has increased by 40 percent compared to the same quarter last year. Microsoft’s overall gaming revenue rose 51 percent.
Surface laptop revenue increased 3 percent and Search advertising revenue excluding traffic acquisition costs increased 2 percent.
Microsoft said its Azure cloud computing services grew 50 percent, the second quarter of acceleration in a business that had begun to slow as the global pandemic benefited the software maker’s investment on working and learning from home.
The shift to work from home due to COVID-19 pandemic has accelerated enterprises’ switch to cloud-based computing, benefiting Microsoft and rivals such as Amazon.com Inc’s cloud unit and Alphabet Inc’s Google Cloud.
Microsoft said they expect a midpoint of $14.83 billion in revenue from the company’s “Intelligent Cloud” segment for the fiscal third quarter.
For the company’s productivity segment and its personal computing segment, sales are expected to have a respective midpoint of $13.48 billion and $12.50 billion.
Microsoft said GamePass, the company’s $10 monthly gaming subscription, has 18 million users, up from 15 million disclosed in September.
The Xbox Live online gaming service has more than 100 million monthly active users. Microsoft did not give an update on the 115 million Teams daily users it disclosed in October but did say that the mobile version is used by 60 million daily users.
Microsoft’s gaming business topped $5 billion in quarterly sales for the first time ever and was propelled by gaming subscriptions and sales as well as new consoles. Microsoft said Xbox content and services revenue grew 40 percent in the quarter.