Today Microsoft has released their Q4 2021 and full-year earnings for the financial year ending June 30, 2021.

For the quarter Microsoft reports revenue was $46.2 billion (up 21% YoY) whole operating income was $19.1 billion (up 42%).

Net income was $16.5 billion (up 47%) while diluted earnings per share was $2.17 (up 49%).

“We are innovating across the technology stack to help organizations drive new levels of tech intensity across their business,” said Satya Nadella, chairman and chief executive officer of Microsoft. “Our results show that when we execute well and meet customers’ needs in differentiated ways in large and growing markets, we generate growth, as we’ve seen in our commercial cloud – and in new franchises we’ve built, including gaming, security, and LinkedIn, all of which surpassed $10 billion in annual revenue over the past three years.”

“As we closed out the fiscal year, our sales teams and partners delivered a strong quarter with over 20% top and bottom-line growth, highlighted by commercial bookings growth of 30% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “Our commercial cloud revenue grew 36% year over year to $19.5 billion.”

Highlights of the quarter include:

Revenue in Productivity and Business Processes was $14.7 billion and increased 25% (up 21% in constant currency), with the following business highlights:

  • Office Commercial products and cloud services revenue increased 20% (up 15% in constant currency) driven by Office 365 Commercial revenue growth of 25% (up 20% in constant currency)
  • Office Consumer products and cloud services revenue increased 18% (up 15% in constant currency) and Microsoft 365 Consumer subscribers increased to 51.9 million
  • LinkedIn revenue increased 46% (up 42% in constant currency) driven by Marketing Solutions growth of 97% (up 91% in constant currency)
  • Dynamics products and cloud services revenue increased 33% (up 26% in constant currency) driven by Dynamics 365 revenue growth of 49% (up 42% in constant currency)

Revenue in Intelligent Cloud was $17.4 billion and increased 30% (up 26% in constant currency), with the following business highlights:

  • Server products and cloud services revenue increased 34% (up 29% in constant currency) driven by Azure revenue growth of 51% (up 45% in constant currency)

Revenue in More Personal Computing was $14.1 billion and increased 9% (up 6% in constant currency), with the following business highlights:

  • Windows OEM revenue decreased 3%
  • Windows Commercial products and cloud services revenue increased 20% (up 14% in constant currency)
  • Xbox content and services revenue decreased 4% (down 7% in constant currency)
  • Search advertising revenue excluding traffic acquisition costs increased 53% (up 49% in constant currency)
  • Surface revenue decreased 20% (down 23% in constant currency)

Microsoft returned $10.4 billion to shareholders in the form of share repurchases and dividends in the fourth quarter of fiscal year 2021, an increase of 16% compared to the fourth quarter of fiscal year 2020.

For the full fiscal year 2021

  • Revenue was $168.1 billion and increased 18%
  • Operating income was $69.9 billion and increased 32%
  • Net income was $61.3 billion GAAP and $60.7 billion non-GAAP, and increased 38% and 37%, respectively
  • Diluted earnings per share was $8.05 GAAP and $7.97 non-GAAP, and increased 40% and 38%, respectively

Compared to analyst expectations:

  • Revenue: $46.15 billion versus $44.25 billion expected
  • Earnings per share: $2.17 versus $1.92 expected
  • Productivity and Business Processes: $14.69 billion versus $13.9 billion expected
  • Intelligent Cloud: $17.38 billion versus $16.4 billion expected
  • More Personal Computing: $14.09 billion versus $13.8 billion expected

Microsoft beat earnings expectations, but their stock was sharply down more than 2.6% in after-hours trading.

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