Microsoft today released the second quarter of its 2021 financial results, reporting revenue of $ 43.1 billion and net revenue of $ 15.5 billion. Revenue increased 17% and net revenue 33%. We saw impressive growth for Surface, Xbox and cloud-related services in Microsoft’s previous quarter, and it’s pretty much the same this time around.
The PC market has just had its first big growth in 10 years, with about 300 million device shipments during 2020. The pandemic has affected the way many people work or learn, and many have chosen laptops to continue remotely.
Non-professional Windows OEM revenue grew 24% for Microsoft, reflecting consumer demand. Overall Windows OEM revenue, including professional licenses, grew 1% in total, probably due to the strong previous Windows 7 upgrade schedule for businesses.
:format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22012261/vpavic_4275_20201030_0038.jpg)
This is the first quarter of sales for Microsoft’s Xbox Series X and Series S consoles. Although both were released at the end of the quarter (November 10), Microsoft says hardware revenue has grown 86 percent, thanks to next-generation consoles.
Xbox content and services revenue also increased 40% compared to the same quarter last year. Games became incredibly popular in 2020, and many clearly turned to the Xbox Game Pass and services like xCloud during the pandemic. This raised Microsoft’s overall gaming revenue by 51%.
On the Surface side, Microsoft’s updated Surface Pro X and Surface Laptop Go were also released during this quarter. Surface revenue increased by 3%, but it is now crucially a $ 2 billion deal for the first time. This is significant for the long-term health of the Surface business and comes during an increased demand for laptops and PCs.
Microsoft also just announced an updated Surface Pro 7 Plus device, available only to businesses and schools. The new model includes a larger battery, 11th generation Intel processors, a removable SSD and LTE.
:format(webp):no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/19250351/akrales_190930_3689_0242.jpg)
Microsoft 365 Consumer subscribers also increased to 47.5 million, an increase of 28%. Microsoft has focused on Teams and Microsoft 365 services for consumers, launching a renewed effort to attract more subscribers in the past year.
Cloud services continue to be a major boost to Microsoft’s revenue, thanks to the general pandemic shift in work and learning behavior. Office commercial and consumer are on the rise, with Office 365 Commercial revenue growing by 21 percent. Revenue from server products and cloud services has also increased by 26 percent as more companies rely on cloud services. Azure’s own revenue grew 50%.
“What we witnessed last year was the start of a second wave of digital transformation that has swept across all companies and all sectors,” said Microsoft CEO Satya Nadella. “Building your own digital capacity is the new currency that drives resilience and growth for all organizations.”
Microsoft is planning to place an investor call at 5:30 pm Eastern Time and we will update this article with all relevant information.