Microsoft today reported its earnings for the third quarter of the fiscal year 2021. The company made an impressive $41.7 billion in revenue, a 19% increase against the same month last year (16% in constant currency, or CC). Operating income for the firm increased by 31% (27% in CC), amounting to $17 billion, leading to a net income of $15.5 billion, a strong 38% increase (32% in CC).
As usual, the company broke the earnings up into three business categories: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Productivity and Business Process accounted for $13.6 billion, increasing by 15% from the same period last year (up 12% in CC), Intelligent Cloud brought in $15.1 billion in revenue, a 23% increase (20% in CC), and More Personal Computing made $13 billion, gaining 19% (16% in CC).
The first of the three, Productivity and Business Processes, includes the likes of commercial and consumer Office products, LinkedIn, and Dynamics. Revenue from Office Commercial products and cloud services increased by 14% (10% in CC), backed by a strong 22% increase in Office 365 Commercial revenue (19% in CC) and a 15% increase in seats. Office Commercial products revenue that includes non-cloud offerings was down 25% (27% in CC) owing to a “shift to cloud offerings”. LinkedIn revenue grew by 25% (23% in CC) and Dynamics products and cloud services was up 26% (22% in CC). However, Dynamics 365 revenue alone grew by 45% (40% in CC).
Next up is the Intelligent Cloud unit that mostly includes Azure and other server products. Revenue from Server products and cloud services was up by 26% (23% in CC). This was driven by a 50% increase in Azure revenue (46% in CC), a constantly growing business for the firm. Server products revenue that includes on-premise and hybrid solutions was up by 3%, which was compared with an already strong quarter last year. The firm also noted that Enterprise Mobility installed base grew by 30% to “over 174 million seats”.
The final business line is the More Personal Computing unit that includes Surface, Xbox, Windows, and Search. Windows OEM revenue saw a 10% increase thanks to strong consumer PC demand, with non-Pro revenue increasing by 44%, offset by a 2% decrease in Pro revenue. Windows Commercial products and cloud services revenue was up 10% (7% in CC).
Revenue from Surface increased by 12% (up 7% in CC), bringing in more than $1.5 billion. The firm did not divulge information on the success of the Surface Pro 7+ for businesses or provide any information on the strong performers. Search advertising was up 17% (14% in CC).
Gaming saw a strong quarter, with revenues increasing by 50% (48% in CC). Xbox hardware revenue was up by a whopping 232% (223% in CC), thanks to demand for the Xbox Series S and Series X consoles. There was a 34% increase (32% in CC) in revenue from Xbox content and services such as first-party and third-party titles, Game Pass subscriptions, and more.