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Microsoft produced its most profitable quarter. Again.
On Tuesday, the company said revenue for the three months ending September was $45.3 billion, up 22 percent from the previous year. Profit rose 48 percent to $20.5 billion.
The results beat analysts’ optimistic expectations and shares rose slightly in post-market trading.
Earnings were driven by success in the Microsoft Cloud business, which includes Office 365 subscriptions and Azure. Sales of these products to commercial customers increased 36 percent in the quarter to $20.7 billion. Analysts say customers are signing larger and longer contracts, and Azure sales are up 50 percent from the same period last year. The company said demand is broad-based across industries and geographies.
The company’s CEO, Satya Nadella, said in a statement that increasing the use of technology could be a “deflationary force in an inflationary economy,” arguing that digital tools can increase productivity and affordability.
This adoption of technology has been fueled by the pandemic. “Covid has shown how well the cloud works,” said Brad Reback, an analyst at investment bank Stifel. Many organizations and large companies had long-term plans to move further to the cloud, but “Covid has pushed their hands to make things move faster. “The success with this has encouraged pro-cloud executives to be more aggressive.”
LinkedIn’s revenue grew 42 percent, driven by strong recruiting demand. This summer, the company said the professional social network has generated more than $10 billion in annual sales.
Microsoft has felt some impact from the congested global supply chain, particularly the lack of certain computer chips. The company said sales of the Windows operating system would have been higher had it not been for the shortage of new computers, but still exceeded the company’s expectations with 10 percent growth.
However, the strength of the company’s core corporate business outweighed any blows there.
Profit benefited from $3.3 billion in one-time tax savings related to the transfer of intellectual property after closing operations in Puerto Rico. Even without that earnings, the company has surpassed its record profit just three months ago.
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