Microsoft has reported its finances for the last quarter of 2021, and the performance was impressive.
While 2021 hurried to its end, Microsoft was busy printing money. The Redmond-based company earned a net income of $18.8 billion from a revenue of $51.7 billion on its global operations. These represent a 20 percent increase in revenue year on year and 21 percent on income.
The company’s performance benefited from a boost in Office, cloud services, and Windows revenue.
Microsoft continued its growth streak in PC revenue, with 340 million sold during the year. This business segment witnessed a 25 percent increase year on year. Its Windows Commercial and cloud services divisions posted a 13 percent increase.
Interestingly, Microsoft’s Surface line performance defied the company’s warning that sales might slow down. The business actually saw an 8 percent jump, although this came immediately after Microsoft launched the Surface Pro 8 and Surface Laptop Studio. The company mentioned the Surface Laptop boosted that Surface revenue.
This year is expected to be a significant year for the Surface line as it marks a decade. We expect to see refreshes to the models through the year. That has started with the release of a matte black Surface Go 3.
Microsoft’s perennial money-maker Office continued to deliver with commercial products and cloud services seeing a 14 percent rise in revenue. The consumer side of Office saw a 15 percent increase. Microsoft 365 Consumer had 56.4 million subscribers, 20 percent better than performance in the same period in 2020.
Server products and cloud services grew a solid 29 percent, with Azure and other cloud services continuing their winning streak by posting a 46 percent increase.
LinkedIn was still proving to be a profitable acquisition for Microsoft, posting 37 percent better performance on the back of growing advertising demand. LinkedIn sessions increased by 22 percent, notching more than 20,000 events. Microsoft’s search and news advertising business also grew by 32 percent.
Gaming also did well last quarter, with revenue jumping by 8 percent overall. Sales from hardware saw a 4 percent increase while Xbox content and service grew by 10 percent year on year. During the last quarter, Microsoft’s Game Pass service grew to 25 million subscribers, thanks to the addition of popular titles like Halo Infinite. Microsoft also added games like Dishonored, The Elder Scrolls, and Wolfenstein after the big-money purchase of Bethesda.
Individual games recorded success, with Halo Infinite attracting more than 20 million players, the biggest launch in the history of the Halo franchise. Also, Forza Horizon 5 has seen 18 million players.
With the acquisition of Activision Blizzard for $68.7 billion, Microsoft’s gaming segment is set to receive a huge boost. The transaction will allow Microsoft to add huge titles like Warcraft, Diablo, Overwatch, Call of Duty, and the enduring Candy Crush. However, that deal is not expected to close until 2023.
Emphasizing the importance of gaming to Microsoft, the company has created a separate division named Microsoft Gaming, with Phi Spencer serving as the CEO.
Microsoft is making a bet on the metaverse, with CEO Satya Nadella saying during the earnings call, “We feel very well positioned to be able to catch what I think is essentially the next wave of the internet. I think the next wave of the internet will be a more open world where people can build their own metaverse worlds, whether they’re organizations, game developers, or anyone else.”