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Microsoft Posts Strong Q3 Results as Pandemic Transformation Continues

Brad Sams


It’s that time of the quarter again where Microsoft has released their earnings. For calendar year Q1, fiscal year Q3, Microsoft reported $41.7 billion in revenue, up 19% year over year, with net income of $15.5 billion.

Microsoft has once again reported strong earnings and is stating that the digital adoption curves that began last year during the start of the pandemic are not slowing down. Satya Nadella states in the earnings release that Microsoft is “building the cloud for the next decade, expanding our addressable market and innovating across every layer of the tech stack to help our customers be resilient and transform”.

Here is how the earnings breakdown by business org:

Revenue in Productivity and Business Processes was $13.6 billion and increased 15%, with the following business highlights:

  • Office Commercial products and cloud services revenue increased 14% driven by Office 365 Commercial revenue growth of 22%.
  • Office Consumer products and cloud services revenue increased 5% and Microsoft 365 Consumer subscribers increased to 50.2 million
  • LinkedIn revenue increased 25%
  • Dynamics products and cloud services revenue increased 26% driven by Dynamics 365 revenue growth of 45%.

Revenue in Intelligent Cloud was $15.1 billion and increased 23%, with the following business highlights:

  • Server products and cloud services revenue increased 26% driven by Azure revenue growth of 50%.

Revenue in More Personal Computing was $13.0 billion and increased 19% with the following business highlights:

  • Windows OEM revenue increased 10%
  • Windows Commercial products and cloud services revenue increased 10% (up 7% in constant currency)
  • Xbox content and services revenue increased 34% (up 32% in constant currency)
  • Search advertising revenue excluding traffic acquisition costs increased 17% (up 14% in constant currency)
  • Surface revenue increased 12% with a reported $1.5 billion in revenue.

One thing is clear, Microsoft has been one of the big winners of the massive digital transformational shift thanks to the COVID-19 pandemic. For more than a year, the company has been posting impressive top and bottom-line growth in many of its primary business markets.

Microsoft More Personal Computing results – Image Credit: Microsoft

In addition, we continue to see strong growth in the PC market. With the completion of this quarter, Microsoft has seen one full year of growth in Windows OEM non-pro revenue which is likely related to more consumers buying PCs as the shift to being at home required additional hardware.

At the end of the quarter, Microsoft had $125 billion in cash on hand. At the time fo this post, the stock was down about 8%.


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