Microsoft Q2 2021 results: strong growth Xbox and Surface

Microsoft today released the second quarter of its 2021 financial results, with revenue of $ 43.1 billion and net income of $ 15.5 billion. Revenue increased 17% and net income increased 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 experienced its first major growth in 10 years, with around 300 million device shipments in 2020. The pandemic has impacted the way many people work or learn, and many have turned. to laptops to continue remotely.

Windows non-professional OEM revenue increased 24% for Microsoft, reflecting consumer demand. Overall Windows OEM revenue, including professional licenses, increased 1% overall, likely due to the strong Windows 7 enterprise upgrade schedule.

Photo by Vjeran Pavic / The Verge

This is the first quarter of sales of Microsoft’s Xbox Series X and Series S consoles. While both debuted towards the end of the quarter (November 10), Microsoft says hardware revenue grew 86%, thanks to next-gen consoles.

Xbox content and services revenue also increased 40% from the same quarter last year. The game has been incredibly popular throughout 2020, and many have clearly turned to Xbox Game Pass and services like xCloud during the pandemic. This pushed Microsoft’s overall gaming revenue to 51%.

On the Surface side, Microsoft’s update to Surface Pro X and Surface Laptop Go also debuted this quarter. Surface revenue grew 3%, but it’s now a $ 2 billion business for the first time. It’s important to the long-term health of the Surface business, and it comes with increased demand for laptops and PCs.

Microsoft also just announced an update to the Surface Pro 7 Plus device, which is only available for businesses and schools. The new model features a bigger battery, 11th generation Intel processors, removable SSD and LTE.

Photo by Amelia Holowaty Krales / The Verge

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 last year.

Cloud services continue to dramatically increase Microsoft’s revenue, driven by the widespread pandemic change in work and learning behaviors. Office commercial and consumer are on the rise, with Office 365 Commercial revenue growth up 21%. Revenue from server products and cloud services also increased by 26% as more businesses depend on cloud services. Azure revenue itself increased by 50%.

“What we have witnessed over the past year is the dawn of a second wave of digital transformation that has swept through every business and industry,” says Satya Nadella, CEO of Microsoft. “Building their own digital capacity is the new currency that drives the resilience and growth of every organization.”

Microsoft plans to host an investor call at 5:30 p.m. ET, and we’ll update this article with all the relevant information.