Microsoft Earnings Soar 22 Percent to $45.3 Billion

Posted on October 27, 2021 by Paul Thurrott in Microsoft with 13 Comments

Microsoft’s pandemic-era lift shows no sign of slowing, with the software giant reporting a net income of $20 billion on revenues of $45.3 billion in the quarter ending September 30. Net income rose by an incredible 48 percent and revenues soared by 22 percent.

“Digital technology is a deflationary force in an inflationary economy,” Microsoft CEO Satya Nadella said of the quarter. “Businesses—small and large—can improve productivity and the affordability of their products and services by building tech intensity. The Microsoft Cloud delivers the end-to-end platforms and tools organizations need to navigate this time of transition and change.”

Of Microsoft’s three main business units, Intelligent Cloud (Azure) the superstar, with $17 billion in revenues, a gain of 31 percent year-over-year (YOY). Productivity and Business Processes—e.g. Microsoft 365—delivered $15 billion in revenues, up 22 percent. And More Personal Computing was again the laggard, with the business responsible for Windows, Surface, and Xbox hitting $13.3 billion in revenues, up 12 percent.

A few quick highlights:

Azure was the primary driver of Intelligent Cloud revenues, with Azure revenue growing 50 percent. The Enterprise Mobility installed base grew 30 percent to 196 million seats.

Office commercial products and clouds services grew 18 percent in the quarter, with Office Commercial revenue growth up 23 percent. Office Consumer products and services grew 10 percent, with Office Consumer subscribers increasing to 54.1 million.

Windows revenues from PC makers grew 10 percent in the quarter, which is better than it looks because Microsoft is deferring Windows 11-related revenues. And Windows Commercial products and cloud services revenue grew 12 percent.

Xbox content and services revenue was basically flat, with 2 percent growth. But Xbox hardware revenue grew 166 percent (when compared to the quarter before the Xbox Series X|S launch).

Surface revenue decreased by 17 percent, but one would expect the current quarter to look a lot better, given the recent product launch and the holiday selling period.

Join the discussion!


Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Comments (13)

13 responses to “Microsoft Earnings Soar 22 Percent to $45.3 Billion”

  1. digiguy

    I guess the title should read revenues, not earnings

  2. maddycom

    What if they had more Xbox consoles to sell

  3. lvthunder

    It's amazing that everything is still growing like that.

  4. SvenJ

    Watch their stock drop because wall street analysts expected 22% growth.

    • locust_infested_orchard_inc.

      Microsoft is an unstoppable force of wealth for those that invest in $MSFT. A day after reporting it's quarterly earnings, $MSFT reached its 52-week high at $326.10, inching ever so close to having a market capitalisation of $2.5 trillion.

      In contrast, Apple is suffering choppiness in it's share price, having disclosed it is suffering from supply-chain problems that will delay ownership of the recently announced IPhone 13. So-much-so, Microsoft may once again overtake Apple in becoming the World's most valuable company. The difference between the two is currently only $35 billion.

  5. harmjr

    And they will soon increase prices on Office or what ever they call the business plans.

  6. blue77star

    By selling garbage such as Azure and D365...spent endless number of house dealing with that crap.

  7. locust_infested_orchard_inc.

    Earlier today on CNBC's 'Squawk on Street', Carl, David and Jim discuss Microsoft's quarterly earnings:

    Jim Cramer: They (i.e., other companies) don't have the growth that Microsoft has, the stability, I am just, err look, that was the blowout. If you had to do a narrative of what happened last night (referring to Microsoft's earnings reported yesterday), it is, who was the star, who was the lead character who gets the Oscar or Emmy ? It is Microsoft.

    Carl Quintanilla: Best quarter of the quarter ? So far ?

    Jim Cramer: Best quarter of the year.

    Carl Quintella: (in total amazement of Jim's response) Best quarter of the year !?

    Jim Cramer: No look, I'm looking at this thing [Microsoft's earnings] and it's ridiculous. This is a giant, multi...(interrupted by co-host David Faber who is exasperated by the astonishing financials).


    Jim Cramer: Satya explained the World to us [referring to Satya's conference call yesterday]. It was an amazing moment on the call. This guy's got such gravitas.

    Take home message: Invest in both Microsoft tech (at home and work), and in $MSFT for one's retirement.

  8. lezmaka

    It shouldn’t be possible for a company this big to grow so much

  9. rbgaynor

    "Surface revenue decreased by 17 percent, but one would expect the current quarter to look a lot better, given the recent product launch and the holiday selling period."

    In the conference call they said to expect single digit declines for Surface in the upcoming quarter:

    In Surface, we expect revenue to decline in the single digits as we continue to work through supply chain uncertainty particularly in our premium devices.

  10. lenh51

    Paul - your headline is not correct. You mixed earnings ("MS Earnings...") and revenue ("soar 22% to...) in the same sentence

    The correct headline would have been MS earnings soar 48% to 20 billion or MS revenues soar 22% to...

  11. MutualCore

    Back 7 years ago, $20.5 billion net income would be a number that blew people's minds. Now when Apple will make $30 billion EBITA this quarter THAT will blow our minds.