Microsoft today posted the second quarter of its 2021 financial results, with revenue of $ 43.1 billion and net income of $ 15.5 billion. Revenue increased by 17 percent and net income increased by 33 percent. We saw impressive growth for Surface, Xbox and cloud-related services in Microsoft’s previous quarter, and this time it’s very much the same.
The computer market has only had its first major growth in ten years, with around 300 million devices shipped by 2020. The pandemic has affected the way many people work or learn, and many have turned to laptops to continue remotely go.
Windows OEM’s non-pro revenue grew by 24 percent for Microsoft, reflecting consumer demand. Total Windows revenue, including pro-licenses, grew by 1 percent, probably due to the strong Windows 7 enterprise upgrade plan.
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This is the first quarter of sales of Microsoft’s Xbox Series X and Series S consoles. While both started by the end of the quarter (November 10), Microsoft says hardware revenue has grown 86 percent, thanks to the next-generation consoles.
Revenue from Xbox and services also increased by 40 percent compared to the same quarter last year. Gaming was incredibly popular throughout 2020, and many clearly turned to Xbox Game Pass and services like xCloud during the pandemic. This increased Microsoft’s total gaming revenue by 51 percent.
On the Surface side, Microsoft’s updated Surface Pro X and Surface Laptop Go also launched during this quarter. Surface revenue has risen 3 percent, but for the first time ever it is a $ 2 billion business. This is important for the long-term health of the Surface business, and it comes during a greater demand for laptops and computers.
Microsoft has also just announced an updated Surface Pro 7 Plus device, available for businesses and schools only. The new model features a larger battery, Intel’s 11th generation processors, a removable SSD and LTE.
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Microsoft 365 consumer subscribers also increased to 47.5 million, a 28 percent bump. Microsoft focuses on Teams and Microsoft 365 services for consumers, and last year made a new effort to attract more subscribers.
Cloud services continue to be a major boost to Microsoft’s revenue, thanks to the general pandemic shift in work and learning behavior. Both Office commercial and consumer are higher, with Office 365 Commercial’s revenue growth of 21 percent. Server products and cloud service revenue also increased by 26 percent as more businesses relied on cloud services. Azure revenue itself increased by 50 percent.
“What we’ve seen over the last year is the emergence of a second wave of digital transformation that is spreading every enterprise and every industry,” said Satya Nadella, CEO of Microsoft. “Developing their own digital capabilities is the new currency that is driving each organization’s resilience and growth.”
Microsoft plans to hold an investor call at 5:30 PM ET, and we will keep this article up to date with all relevant information.