Microsoft: a strong third quarter thanks to remote working tools

Cloud business revenue was $ 13.3 billion, up 39% from the previous year.

Microsoft has crushed expectations for its third quarter as the company has seen strong demand among its cloud computing services. Cloud commercial revenue was $ 13.3 billion, up 39% from the previous year.

The company reported third-quarter net income of $ 10.8 billion, or $ 1.40 per share, on revenue of $ 35 billion, an increase of 15%.

Wall Street expected Microsoft to report earnings of $ 1.26 per share in the third quarter on revenue of $ 33.66 billion.

Accelerated digital transformation

Satya Nadella, CEO of Microsoft, explains the increase in demand through remote work, facilitated by the brand's cloud tools and services. According to him, Microsoft has seen "two years of digital transformation in two months".

Microsoft has been little impacted by the pandemic, but the company nuances because the full effects "may not be fully reflected in the financial results until future periods".

Demand was strong on product lines such as Teams, Azure and Windows Virtual Desktop. Windows revenue and Surface sales also grew well. All these products make it possible to work remotely. Microsoft, however, noted a slowdown in SME licensing and LinkedIn advertising in the final weeks of the quarter.

Here is the detail of the evolution by product lines and divisions for the third quarter:

• Azure's revenues increased 59% to help the Intelligent Cloud unit generate revenue of $ 12.3 billion, an increase of 27%.
• Dynamics' revenues increased 17%, which enabled the "Products and business processes" unit to achieve sales of $ 11.7 billion, an increase of 15% compared to the last year.
• Office 365 business revenue increased 25%.
• More Personal Computing posted sales of $ 11 billion, 35% more than a year ago. Windows commercial products and cloud computing services performed best.
• According to Microsoft, Surface revenues increased by 1% due to strong demand, but this increase was offset by supply chain constraints in China.
• Search engine advertising increased by 1%, but saw a reduction in spending by industries affected by Covid-19.