Microsoft has revealed its results for the third quarter of 2020 (what it considers as the Q1 of the fiscal year 2021), noting a massive in revenues. During the quarter that ended on September 30, Microsoft earned $37.2 billion in revenues and recorded $1.82 in earnings-per-share. As compared to the same period last year, revenue is up by 20%, whereas, earnings-per-share has increased by 32%.
Amy Hood, executive vice president and CFO of Microsoft, said, “Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue-generating $15.2 billion, up 31% year over year. We continue to invest against the significant opportunity ahead of us to drive long-term growth.”
Microsoft’s net income is reported at $13.9 billion and an operating income of $15.9 billion, up by 30% and 25% respectively. Intelligent Cloud, which includes Azure products, was the highest-earning unit of Microsoft’s businesses with revenue of $13 billion, climbing 20% from last year. The COVID-19 pandemic called for an increased demand for cloud services as most companies looked to transform into a digital platform. Microsoft’s cloud service revenue increased 22%, driven by Azure’s revenue growth of 48%.
The company’s growth in the cloud sector has been so prominent, that it is looking to launch a separate cloud platform just for the space industry, dubbed ‘Azure Space’.
Second on Microsoft’s highest-earning units is ‘ Productivity and Business Processes’, with a revenue of $12.3 billion, up by 11% from last year. This business unit includes products like Microsoft Office 365 and Linkedin. Microsoft 365 reported an increase in consumer subscribers to 45.3 million, which resulted in the growth in its revenues by 13%. Linkedin too earned a lot more than it did an year before, with a 16% increase in revenues for the business-oriented social media platform.
More Personal Computing, Microsoft’s third business unit, contributed $11.8 billion to the company’s revenue. Under this unit, Microsoft sells products like Windows, Xbox and Surface PCs. The company said that apart from Windows OEM, all other personal computing products recorded an increase in revenues.
The Seattle-based company has exceeded expectations of the analysts, who projected $35.72 billion in revenue and $1.54 in earnings per share. However, this exceptional performance did not have any major impact on the company’s share price, which is still hovering around $214 (currently $213.35), with no significant increase.
The shareholders at the company received $9.5 billion in the form of share repurchases and dividends from Microsoft in the company’s FY 2021 Q1. This is an increase of 21% from the same period last year.
Satya Nadella, CEO of Microsoft, said, “The next decade of economic performance for every business will be defined by the speed of their digital transformation. “We are innovating across our full modern tech stack to help our customers in every industry improve time to value, increase agility, and reduce costs.”