The company’s stock shot up as much as 6% in after-hours trading immediately following the report. About two hours after the report, shares were up just over 3%.
«What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,» Microsoft CEO Satya Nadella said in a statement. «Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform.»
Commercial cloud revenue — which includes Office 365 Commercial, an essential tool for many businesses whose employees are still working from home — posted year-over-year growth of 34%, totaling $16.7 billion.
«This cloud shift and WFH dynamic looks here to stay and the company stands to be a major beneficiary of this trend,» Wedbush analyst Dan Ives said in a note to investors Tuesday.
Microsoft also expects the strong growth in its cloud business to continue — it projects that revenue from its intelligent cloud segment, which includes Azure, will grow as much as 21.5% during the current quarter, which ends March 31, CFO Amy Hood said during a call with analysts Tuesday.
Revenue from Microsoft’s «more personal computing» segment, which Xbox sales fall under, increased 14% year-over-year to $15.1 billion.
That number includes the company’s quarterly gaming revenue, which surpassed $5 billion for the first time. Xbox content and services revenue grew 40% — a major turnaround compared to the same period a year earlier, during which Xbox content and services revenue had decreased 11%.
«The launch of Xbox Series X and Series S was the most successful in our history, with the most devices ever sold in the launch month,» Nadella said on the Tuesday earnings call, adding that the company is gaining console share. Hood noted that the company expects «significant demand for the Xbox Series X and S that will still be constrained by supply» in the current quarter.
For the full fiscal year 2021, Hood said the company expects to generate double digit growth of both revenue and operating income.