Microsoft triumphs in Q3 results

The tech giant toppled estimates in both top and bottom line growth

Microsoft has posted record earnings for its Q3 results, driven by its strong cloud business.

Revenues were up 19 per cent to $41.7bn while non-GAAP net income came in at $14.8bn, a rise of 38 per cent from the same period last year -- outperforming the $41.1bn estimate of analysts polled by Bloomberg.

"It was a record quarter, powered by our continued strength of our commercial cloud," said Microsoft CEO, Satya Nadella in an earnings call.

"Over a year into the pandemic, digital adoption curves aren't slowing down. In fact, they're accelerating, and it's just the beginning.

"Digital technology will be the foundation for resilience and growth over the next decade."

Productivity and Business Processes revenue was highlighted as a growth contributor, rising 15 per cent to $13.6bn (€11.2bn), boosted by commercial and consumer products such as Office 365 and Microsoft 365, as well as LinkedIn.

"Microsoft continues to see its revenue soar, and part of this success is due to the increasing reliance on collaboration-based tools like Teams. Since the beginning of the pandemic, Teams has provided employees the means to stay connected, even when miles apart," said Dan Davies, CTO of cloud company, Maintel.

Cloud fuelled growth

"The Microsoft Cloud, with its end-to-end solutions, continues to provide compelling value to our customers generating $17.7bn (€14.6bn) in commercial cloud revenue, up 33 per cent year over year," said Microsoft executive vice president and chief financial officer, Amy Hood.

Intelligent could revenue rose by 23 per cent to $15.1bn (€12.5bn), driven in large part by 50 per cent revenue growth in its cloud computing business, Microsoft Azure, which saw a larger increase of 59 per cent in Q3 2020.

Nadella added that as the world's businesses adapt to become more digitally driven, the tech giant is building Azure to address organisations' needs in a multi-cloud environment.

"Azure has always been hybrid by design, and we are accelerating our innovation to meet customers where they are," he said.

Gaming

Revenue in More Personal Computing was $13bn (€10.7bn) and increased 19 per cent, with Xbox as the main contributor in this segment, soaring by 34 per cent.

"People are turning to Xbox more than ever to play and chat with friends, and we saw record engagement this quarter, led by strength on and off-console," Nadella explained.

Gaming sales surged 50 per cent, with Xbox hardware revenue rocketing 232 per cent, following the launch of the Xbox Series X and S.