Microsoft Q1 2021 earnings: Surface, Xbox, and cloud boost revenue

Microsoft posted the best quarter of its 2021 business results now, coverage revenue of $37.2 one thousand million and a net income of $13.9 billion. Tax income is up 12 percent, and net income has increased by 30 percent. While the ongoing pandemic continues to force many to wreak remotely during an profitable downturn, Microsoft is benefiting from the switching in the way people are now working, playing games more, and connecting to others through with videoconferencing.

Cloud services are the biggest boost to Microsoft's revenues from the pandemic dislodge in behavior. Both Office commercial and consumer are up, with Office 365 Commercial taxation ontogenesis up by 21 percent. Waiter products and cloud services revenue has also increased 22 percent as more businesses rely on mist services for remote employed. Azure revenue itself grew 48 percent.

The biggest newsworthiness here from a consumer point of view is that Microsoft 365 Consumer subscribers have likewise increased to 45.3 million. That's a jump of 27 percent year-finished-year, and liable thanks to Microsoft's renewed focus on consumers with Microsoft 365 and Microsoft Teams earlier this year.

Cloud and Office aren't the only products impulsive Microsoft's growth, though. Surface receipts has jumped by 37 percent this quarter to $1.5 billion. That's a Brobdingnagian gain for a quarter that hasn't seen any new Surface devices introduced. Microsoft only good introduced a new Surface Laptop computer Go device and updated Surface Pro X earlier this month, simply those will count to next quarter's revenue.

Terminated on the gaming sidelong, Xbox content and services revenue has also increased significantly past 30 percent compared to the same quarter last class. A number of consumers have turned to gaming and services like xCloud or Gimpy Pass during the pandemic, and information technology's clear in that respect's an increased need for Microsoft's gaming services. Microsoft notes that Xbox Secret plan Pass subscriptions and strength in third-party and first-party titles helped with revenue.

Microsoft is now gearing up to launch its next-gen Xbox Series X and Series S consoles connected November 10th. The consoles complement Microsoft's xCloud game streaming serving that launched ultimate month, and the troupe's ongoing efforts with Xbox Game Pass. Microsoft revealed it has 15 meg Xbox Game Pass subscribers last month, merely the company hasn't provided any strong numbers today.

Microsoft appears to be bullish about demand for the Xbox Series X and S consoles. "We expect identical strong demand following the launch of our following-generation Xbox Series X and S consoles," aforementioned Microsoft CFO Amy Hood during a call with investors. This demand should drive "supply constrained hardware revenue growth of some 40 percentage" close quarter.

Microsoft rumored a stand out in Windows usage earlier this yr after lockdowns throughout many parts of the world light-emitting diode to inaccessible operative for umteen. This jump in employment hasn't resulted in increased Windows OEM taxation during this quarter, though. Windows OEM revenue has born 5 per centum, and Microsoft blames lower commercial demand for the magnetic dip.

While commercial demand for PCs might be softening, Windows OEM not-pro tax income has grown aside 31 per centum, thanks to consumer PC demand. It's likely that students and families are driving this growth during the pandemic, turning to PCs to help support distant acquisition. During an earnings call with investors, Microsoft CEO Satya Nadella said "PCs stimulate become delegation serious," and that Microsoft is seeing double finger's breadth growth in each month active devices for Windows 10.

Elsewhere, LinkedIn revenue has also grown by 16 percent year-over-year with 722 million users. Search revenue has decreased by 10 percent, though. Microsoft splits its various businesses into three buckets: productivity and business processes, intelligent sully, and more personal computing. The more person-to-person computing bucket includes Surface, Xbox, and Windows, and Microsoft says gaming and Surface drove its revenue growth of 6 percent for this tail.

Azure swarm the scintillating cloud receipts growth, and Bureau 365 and LinkedIn helped the productivity and business processes bucket. It's clear that these independent revenue drivers — Sky-blue, gambling, Surface, and Office — have been influenced by the pandemic.

Microsoft CEO Satya Nadella said at the beginning of this general that the companionship had witnessed "two years' worth of digital transformation in two months." That transformation appears to be continuing for many businesses, students, and consumers.

Update, October 27th 6:10PM ET : Clause updated with comments from Microsoft's investor call.