Microsoft earnings Q3 FY2021: $41.7B in revenue with strong Xbox and Surface growth

Microsoft earnings Q3 FY2021: $41.7B in revenue with strong Xbox and Surface growth

Today, Microsoft released its quarterly earnings report. During the third quarter of its 2021 fiscal year, it brought in $41.7 billion in revenue, a 19% increase over last year. Operating income was $17 billion, a 31% increase, and net income was $15.5 billion GAAP and $14.8 billion non-GAAP, which is a 44% and 38% increase, respectively.

As usual, Microsoft earnings are broken up into three groups: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. Those accounted for $13.6 billion, $15.1 billion, and $13 billion in revenue, respectively, for year-over-year growth of 15%, 23%, and 19%.


Starting with Productivity and Business Processes, that included a 14% (10% constant currency) increase in revenue from Office Commercial products and cloud services. Breaking that down, Office 365 Commercial revenue is up 22% (19% CC), while products declined 25% (27% CC). On the consumer end, Office products and cloud services revenue increased by 5% (2% CC), and Microsoft 365 Consumer subscribers are now at 50.2 million.

LinkedIn revenue continues to grow, as it’s up 25% (23% CC), and Microsoft says that sessions are up 29%. Dynamics products and services are up 26% (22% CC), once again driven by cloud offerings with Dynamics 365 revenue up 45% (40% CC).

And then there’s the Intelligent Cloud bucket, which is now Microsoft’s biggest business. Inside of that bucket is server products and cloud services, which is up 26% (23% CC), driven by Azure revenue, which is up an impressive 50% (46% CC). Server products are up 3%.

Finally, we have the More Personal Computing category, which is up 19% (16% CC) as a whole. Windows OEM revenue is up 10% thanks to the work from home demand. That’s particularly impressive since last year, it was touting strong results thanks to the Windows 7 end of life. Windows OEM Pro revenue still declined 2%, but non-Pro grew by 44%.

It was also a big quarter for hardware, with a 12% (7% CC) increase in Surface revenue. Xbox revenue was big too though. Gaming as a whole increased by 50% (48% CC), and that includes a 232% (223% CC) increase in gaming hardware revenue. Naturally, that’s thanks to the new Xbox Series X|S. Gaming content and services increased by 34% (32% CC).

Finally, search advertising revenue increased by 17% (14% CC). In other words, it was all-around a pretty great quarter for Microsoft.

About author

Rich Woods
Rich Woods

Managing Editor for XDA Computing. I've been covering tech from smartphones to PCs since 2013. If you see me at a trade show, come say hi and let me ask you weird questions about why you use the tech you use.

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