Microsoft Triumphs By Sealing A Record-Breaking Fiscal Year

Despite weaker Surface and Windows revenue amid global chip shortage, Cloud and Office have saved the day at Microsoft Corporation MSFT. Moreover, Teams workplace collaboration software now has nearly 250 million active monthly users and its Teams enterprise phone business, a category Zoom Video Communications ZM has identified as a key growth area, also is seeing strong growth of nearly 80 million monthly active Teams phone users.

Q4 Of FY 2021

For the quarter that ended on June 30^th, revenue increased 21% as it amounted to $46.2 billion, delivering a net income of $16.5 billion, an increase of 47%. Cloud and Office services have boosted Microsoft's revenues, offsetting weakened fronts due to the global chip shortage.

The Heroes Of The Revenue Day

Windows commercial products and cloud services revenue, including Microsoft 365 has increased 20 percent. Multi-year agreements and the company's push towards its bundling of Office and Windows did the trick. Office commercial revenue and Office consumer revenue both went up 20% and 18 %, respectively. Microsoft 365 consumer subscriber base grew 22 percent YoY to 51.9 million.

Server and cloud services revenue grew 34% this quarter, with Azure alone that is competing directly with Amazon.com Inc.'s AMZN AWS going up 51%. Microsoft's Intelligent Cloud business revenue amounted to $17.4 billion, contributing 37% to Microsoft's revenue table.

LinkedIn has become a $10 billion annual business for Microsoft with its revenue up 46 percent YoY, thanks to stronger advertising demand after a dip that occurred during the first days of the pandemic. With record engagements, sessions grew 30 percent, and search advertising revenue consequently rising 53 percent.

Global Chip Shortage

The PC market experienced its first big growth in a decade earlier this year, a trend that has been hampered by a global chip shortage. Microsoft's Windows results are a clear reflection of that laptop and PC sales decreasing as Windows OEM revenue has dropped 3% percent due to "supply chain" constraint with non-pro OEM revenue declining 4% and pro revenue dipping 2 percent.

All In On Games

Now on their third quarter of sales, Xbox Series X and Series S consoles are Microsoft's fastest-selling consoles to date. As expected, they helped grow hardware revenue up again, 172 percent more precisely. Overall gaming revenue is up by 11%, but Xbox content and services revenue has declined by 4%. For the second quarter now, Microsoft did not disclose new Game Pass subscriber numbers, after revealing back in January that it had 18 million.

See also: How To Buy Microsoft Stock

An Optimistic Outlook

Microsoft is planning to boost the PC market with the upcoming Windows 11 in October. As for the fiscal first-quarter revenue outlook, it expects $14.5 billion to 14.75 billion from its Productivity and Business Processes segment, $16.4 billion to $16.65 billion from the Intelligent Cloud segment, both of which exceed StreetAccount estimates. The only slightly short of the StreetAccount consensus is the More Personal Computing segment which is expected to bring in $12.4 billion to $12.8 billion.

Cloud services, Office, and LinkedIn managed to offset the harmed Windows and Surface segments with impressive revenue growth. Moreover, over the past 3 years, gaming, security, and now LinkedIn, have all surpassed $10 billion in annual revenue, providing Microsoft with nothing but blue skies ahead.

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