As is customary these days, Azure and Microsoft Cloud are driving growth, while once again Microsoft outpaced analyst predictions. There was also some good news for the company’s smaller divisions. Specifically Microsoft Surface, which had its highest-ever revenue quarter. For its fiscal second quarter 2021 (Q4 2020 calendar year), Microsoft took an excellent $43.1B in revenue. Once again this marks significant growth for the company, 17% year-on-year over the same period. Operating income stood at $17.9B, a sizeable 29% improvement. As for net income, it rose 33% to $15.5B. As always, Microsoft breaks down its overall revenue into three categories:
Intelligent Cloud with $14.6B in revenue (up 22%) Productivity and Business Processes with $13.4B in revenue (up 13%) More Personal Computing with $15.1B in revenue (up 17%)
So, once again Microsoft is showing it is thriving and was clearly unaffected by the COVID-19 pandemic and following economic downturn.
Productivity and Business Processes
Microsoft’s category that includes platforms like LinkedIn, Dynamics, and Office offered another strong round. For Microsoft Office Commercial services, revenue increased be 11%, including a 21% improvement for Office 365 Commercial revenue. Microsoft also says the number of people using Office 365 Commercial grew by 15%. Non-cloud Office Commercial (non-365) was a rare low point, dipping 26% year-on-year. As for Office on the consumer side, it too enjoyed growth (7%), including a 28% increase in subscribers, with 47.5 million consumers now using the service. LinkedIn continues to do well under Microsoft’s wing and saw its revenue increase 23%. Finally, Dynamics increased 21%.
Intelligent Cloud
Microsoft Cloud performance mostly driven by Azure as been the force that has put the company in its current financial golden generation. Once again last quarter Intelligent Cloud services continued to thrive. Indeed, server and cloud services increased by 26%, mostly thanks to a 50% revenue boost for Azure. On-premises server products are arguably in the past, but even here Microsoft saw a 4% YoY increase. The end of support of Windows 2008 and many customers upgrading helped this growth. Microsoft says its Enterprise Mobility division saw its install base jump 29% to 163 million seats.
More Personal Computing
This is arguably the category that brings the most general interest because it includes consumer products like Windows 10, Surface, and Xbox. For Windows OEM revenue, growth was limited to 1% (9% decline for Windows OEM Pro and 24% increase for non-Pro Windows 10 SKUs). Surface was one of the big announcements during Microsoft’s latest financials. Revenue increased a modest 3% and Microsoft was typically quiet on sales numbers. However, the $2B revenue the division made was the first time the Surface division generated more than $2 billion. On the Xbox gaming front, Microsoft had a predictably bumper quarter. The release of the Xbox Series X and Xbox Series S ensured a 51% boost in revenue, driven by an 86% improvement in hardware sales. Tip of the day: Worried about your privacy in Windows 10 or want to keep different PCs linked to your Microsoft account strictly separate? We show you how to adjust your Windows 10 sync settings , including the clipboard, activity history/timeline, and themes.
