Microsoft experienced a better-than-expected fourth fiscal quarter, thanks largely to the work-at-home requirements of the COVID-19 pandemic.
The firm reported net income of $11.2 billion on revenues of $38 billion in the quarter ending June 30. Net income was up 13 percent year-over-year, while revenues jumped 15 percent.
“The last five months have made it clear that tech intensity is the key to business resilience,” Microsoft CEO Satya Nadella said in a prepared statement. “Organizations that build their own digital capability will recover faster and emerge from this crisis stronger. We are the only company with an integrated, modern technology stack—powered by cloud and AI and underpinned by security and compliance—to help every organization transform and reimagine how they meet customer needs.”
Addressing COVID, Microsoft noted that “business trends” in the quarter were “similar to the previous quarter.” Cloud usage and demand increased as customers continued to work and learn from home, the firm said, while transactional license purchasing, conversely, continued to slow, particularly in small and medium businesses, while LinkedIn “was negatively impacted by the weak job market and reductions in advertising spend.” Windows sales to PC makers, Surface, and the Xbox business all benefited from increased demand due to “work-, play-, and learn-from-home scenarios.”
Of Microsoft’s three primary business units, Intelligent Cloud was the biggest, at $13.4 billion in revenues and growth of 17 percent YOY. More Personal Computing was number two, with $12.9 billion in revenues and growth of 14 percent YOY. Productivity and Business Processes brought up the rear with $11.8 billion in revenues and 6 percent growth YOY.
Looking at these businesses more closely, Intelligent Cloud saw a 19 percent increase in revenues related to servers and cloud services, while enterprise services were relatively unchanged YOY. Azure revenues were up 47 percent. And enterprise mobility seats grew 26 percent to 147 million.
More Personal Computing saw big gains across all of its major businesses except for search. Windows revenues from PC makers were up 7 percent. Windows commercial was up 9 percent. Xbox content and services surged an incredible 65 percent. And Surface revenues increased 28 percent to $1.7 billion.
At Productivity and Business Processes, Office commercial jumped 5 percent, while Office consumer rose 6 percent; Office 365 Commercial was the bright spot, with 19 percent revenue growth. And Office 365 consumer now has 42.7 million subscribers, up 23 percent. LinkedIn revenues were up 10 percent. And Dynamics grew by 13 percent.