Here are all the key points from Microsoft's earnings report
Microsoft has posted its financial results for the fourth quarter of the fiscal year 2021. The company reported $46.2 billion in revenue, and $16.5 billion as its net income. This marked a 21 percent uptick in revenue while the net income is 47 percent higher than last year. Cloud and Office services saved the day for the company. Here's more.
Yahoo Finance reports that the company's results beat expectations which were pegged at $44.1 billion in earnings and earnings per share of $1.90. The company's real-world earnings per share for the quarter stood at $2.17. Microsoft's cloud computing solution Azure posted 51 percent year-on-year growth in revenue, the best statistic it posted since Q3 in 2020.
The server and cloud business grew 34 percent this quarter. The overall revenue recorded by Microsoft's Intelligent Cloud business was $17.4 billion. It made up 37 percent of the company's total revenue. LinkedIn's revenue also saw a 46 percent uptick fuelled by stronger demand for advertising recently. The platform reportedly saw "record engagement" while its sessions grew by 30 percent.
LinkedIn is now a $10 billion annual business for the parent company. Its Search advertising revenue is also up by 53 percent since last year. In the company's earnings call, CEO Satya Nadella said, "In the past three years, gaming, security, and now LinkedIn, have all surpassed $10 billion in annual revenue". Microsoft Office also recorded impressive growth.
Commercial Office revenue is up by 20 percent while consumer sales saw a similar 18 percent increase. Overall, Microsoft 365 consumer subscribers also increased 22 percent year-on-year to 51.9 million users. As Nadella mentioned, the gaming business recorded an 11 percent boost even though Xbox content and service revenue dropped by four percent. Xbox Game Pass subscriptions reportedly grew.
This is the second consecutive quarter that Microsoft hasn't shared Game Pass subscriber numbers. However, on the gaming hardware front, Nadella remarked, "Xbox Series S and X are our fastest selling consoles ever, with more consoles sold life-to-date than any previous generation." In the third quarter that the Series S and X have been selling, console sales revenue went up by 172 percent year-on-year.
Additionally, this is the first time Microsoft hardware including the Surface Laptop 4 and the Surface Pro 7 affected the total Surface revenue that slid down by 20 percent this quarter. Microsoft blamed the decline on "supply constraints". The company's Windows operating system also recorded a drop in revenue. The OEM version dropped three percent while OEM Pro revenue dipped two percent.
While non-Pro OEM Windows revenue dipped four percent, Microsoft blamed it on "supply chain constraints". The company hopes that Windows 11 will boost the market. The new operating system is expected to ship in October this year with a significant visual overhaul that led to a simplified user interface, and several functional improvements including the ability to run Android apps.