Growth in Microsoft’s cloud computing business helped push its profit up 24% in the July-September quarter compared to the same period last year.
The Redmond, Wash., Based tech company on Tuesday reported quarterly profit of $ 17.2 billion, or $ 2.27 per share, beating Wall Street expectations of $ 2.08 per share .
Microsoft’s profits have skyrocketed throughout the pandemic thanks to continued demand for its cloud computing software and services for remote work and study.
Microsoft reported revenue of $ 45.3 billion in the first fiscal quarter, up 22% from a year ago. Analysts were looking for $ 44 billion in revenue, according to FactSet Research. Microsoft shares rose nearly 2% in after-hours trading.
Sales of what Microsoft calls its “intelligent cloud” segment, which includes server products and its Azure cloud computing platform, were $ 17 billion, up 31% from a year ago. a year. The company competes fiercely with Amazon, Google, and other cloud providers for big business and government contracts.
“We are innovating across the technology stack to help organizations reach new levels of technology intensity in their businesses,” Satya Nadella, chief executive officer of Microsoft, said in a statement. “Our results show that when we perform well and meet customer needs in a differentiated way in large and growing markets, we drive growth, as we’ve seen in our business cloud – and in the new franchises that we have. have built, including games, security, and LinkedIn, all of which have surpassed $ 10 billion in annual revenues over the past three years.
There has been relatively slower growth in Microsoft’s personal computing business segment, which includes Windows software licenses for new computers. Segment sales increased 12% to $ 13.3 billion.
Microsoft has unveiled the next generation of its Windows software, called Windows 11, its first major update in six years. But the PC market has also been hit by supply chain issues.
“As we closed the year, our sales teams and partners had a strong quarter with over 20% growth in revenue and net income, evidenced by 30% growth in commercial bookings. year over year, ”said Amy Hood, executive vice president and chief financial officer of Microsoft. “Our cloud business revenue grew 36% year-over-year to $ 19.5 billion. “
Revenue for Microsoft’s job networking service LinkedIn increased 42% from the same period last year. The company announced earlier this month that it would be shutting down its localized version of LinkedIn in mainland China, citing the tightening of government restrictions affecting the only major Western social networking platform still operating in the country.
LinkedIn doesn’t disclose how much of its revenue comes from China, but it says it has more than 54 million members in the country, its third-largest user base after the United States and India.
Microsoft also on Tuesday announced a short-term tax benefit of $ 3.3 billion from its transfer of certain intangibles from its Puerto Rico subsidiary. The company had been subjected to scrutiny by the Internal Revenue Service over how it structured a facility in Puerto Rico from 2005, leading a federal judge to say last year that Microsoft was trying likely to avoid or evade payment of US taxes through its cost-sharing arrangement with the affiliate.