Microsoft Revenues Soared 18 Percent in Q1

Microsoft announced today that it earned a net income was $16.7 billion on revenues of $49.4 billion in the quarter ending March 31. Those figures are up 8 percent and 18 percent, respectively, year-over-year (YOY).

“Going forward, digital technology will be the key input that powers the world’s economic output,” Microsoft chairman and CEO Satya Nadella said. “Across the tech stack, we are expanding our opportunity and taking share as we help customers differentiate, build resilience, and do more with less.”

Microsoft credited better-than-expected commercial bookings—up 28 percent YOY—and “continued customer commitment” to its cloud platform for the gains. Microsoft Cloud revenue was $23.4 billion in the quarter, up 32 percent YOY.

As you may know, Microsoft has three core business units. Intelligent Cloud (Azure, Server, Enterprise Mobility) delivered $19 billion in revenues, compared to $15.8 billion for Productivity and Business Processes (Microsoft 365, Office, and Dynamics) and $14.5 billion for More Personal Computing (Windows, Xbox, Surface).

A few highlights from the quarter:

Azure growth was 46 percent in the quarter, compared to 50 percent in the year-ago quarter.

Server and cloud services revenue was up 29 percent YOY.

Enterprise Mobility seats hit 218 million, up 25 percent YOY.

Office commercial products/cloud services revenues were up 12 percent overall, while Office 365 commercial revenue was up 17 percent and Office commercial products revenue was down 28 percent.

Office consumer products/cloud services revenues were up 11 percent YOY, and the Microsoft 365 consumer subscriber base grew 16 percent to 58.4 million.

Windows revenues from PC makers grew 11 percent, but Microsoft didn’t report consumer revenues specifically; instead, it called out commercial PC sales growth. Windows commercial products and services revenues grew 14 percent.

Gaming revenue overall grew 6 percent, while Xbox hardware revenue grew 14 percent and Xbox content and services revenue grew 4 percent. Microsoft noted here that this was compared against a strong year-ago comparable and that Xbox Game Pass subscription revenues and first-party titles helped partially offset a decline in revenues from third-party titles.

Surface revenues were up 13 percent.