Microsoft revenue jumped 12 per cent last quarter, buoyed by software, gaming and cloud services. Search and advertising revenue continues to fall for Microsoft, however, as it too struggles with a weaker media market.

Overall the tech giant posted record profits of US$13.9 billion in the three months ended September 30, up 30 per cent from the same pre-pandemic period last year.

Microsoft today reported FY2021 Q1 results including revenue of US$37.2 billion, up 12 per cent on the same period last year. Demand for cloud services surged during the pandemic with Microsoft’s public cloud, Azure, growing in revenue by 48 per cent. 

Microsoft does not break out revenue from Azure in dollars, but its Intelligent Cloud segment, which includes Azure, Enterprise Services, GitHub and server products like SQL Server and Windows Server, contributed US$12.99 billion in revenue, up 20 per cent year on year.

Revenue in “Productivity and Business Processes”, which includes Microsoft’s Office products, LinkedIn and Dynamics, was US$12.3 billion, an increase of 11 per cent.

Personal computing was also up six per cent for the tech giant, with Xbox revenue up 30 per cent and Surface laptops generating 37 per cent more revenue this year.

Microsoft did feel some negative financial impacts from the pandemic with its ad business falling significantly again. Search advertising excluding traffic acquisition costs fell 10 percent last quarter. In the previous quarter it fell 18 per cent.

“The next decade of economic performance for every business will be defined by the speed of their digital transformation,” said Microsoft CEO Satya Nadella. “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 US$15.2 billion, up 31 per cent 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.”

Despite the overall revenue growth Microsoft shares were down slightly, according to analysts, because the company reported quarterly revenue guidance that fell short of expectations.

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