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Cloud and Office help boost Microsoft results ahead of Xbox Series X launch

Microsoft
(Image credit: Shutterstock / tanuha2001)

Microsoft has revealed a major rise in revenue and profits for its Q1 2021 in spite of the pandemic that has affected businesses around the world.

The computing giant revealed that revenues grew 12% to hit $37.2bn in the quarter ending September 30, 2020, with net income up 30% to hit $13.9bn.

The success was fuelled by growth across a number of Microsoft's key business areas, with cloud computing, Office, LinkedIn and Microsoft Teams all singled out for praise.

Microsoft growth

Perhaps unsurprisingly, as businesses around the world migrated towards remote working, Microsoft's cloud division saw a major rise. The company's Azure business grew 48% year-on-year, with server products and cloud services revenue also increasing 22%.

However Office products also saw a big rise across both enterprise and consumer offerings, with Office 365 Commercial revenue growing 21% year-on-year, and Office Consumer products and cloud services seeing a 13% growth.

Microsoft 365 Consumer subscribers increased to 45.3 million, an increase of 27% compared to last year, and LinkedIn revenue grew by 16% year-over-year as the social media network reached 722 million users.

Elsewhere, Surface revenue has jumped by 37% to $1.5 billion depsite no new Surface devices being launched in the quarter, with Xbox content and services revenue seeing a 30% rise - a number that should continue rising after Microsoft launches its next-gen Xbox Series X and Series S games consoles on November 10.

“The next decade of economic performance for every business will be defined by the speed of their digital transformation,” said Satya Nadella, chief executive officer of Microsoft. “We are innovating across our full modern tech stack to help our customers in every industry improve time to value, increase agility, and reduce costs.”

“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to invest against the significant opportunity ahead of us to drive long-term growth.”