Microsoft's Azure cloud computing business once again proved to be a money-making engine in the company’s fiscal Q3 2021 (ended March 31, 2021), helping the company achieve its highest overall revenue growth in more than two years.
During an earnings call, CEO Satya Nadella noted that “over a year into the pandemic, digital adoption curves aren't slowing down. In fact, they're accelerating, and it's just the beginning.”
Consolidated revenue of $41.7 billion increased 19% year over year, marking Microsoft’s highest growth rate since its fiscal Q1 2019 (ended September 30, 2018). Net income of $15.5 billion jumped 44%.
Patrick Moorhead, principal analyst at Moor Insights and Strategy, told Fierce the company had “a very good quarter, and it grew where you would expect it to, in areas of strength and during the pandemic.” He added areas including “cloud, enterprise SaaS apps, gaming and client computing and collaboration are strong market-wide.”
Microsoft CFO Amy Hood noted on the call that revenue for its Intelligent Cloud unit grew 23% to $15.1 billion. The company doesn’t break out revenue for different products within that segment. However, Hood noted Azure revenue increased 50% year on year, a figure which was “better than anticipated” thanks to “continued strength in our consumption-based business.”
She added overall commercial cloud revenue also beat expectations, increasing 33% to $17.7 billion.
“In our commercial business, accelerating digital transformation enabled by our unique Microsoft Cloud value, drove healthy demand for our hybrid and cloud offerings,” she stated. “Strong Azure consumption, increased platform commitments, and higher usage of Teams, Power Platform, and our security offerings were key beneficiaries.”
Looking ahead, Hood noted that in Microsoft’s fiscal Q4 it expects Intelligent Cloud revenue of between $16.2 billion and $16.45 billion, with Azure revenue again “driven by strong growth in our consumption-based business.”
She said growth rates across the board will reflect “the first full quarter impact of COVID-19 a year ago.”