Cloud revenue growth holds steady as Microsoft Q1 2021 results outperform

October 27 2020

Microsoft announced its Q1 FY 2021 earnings with revenue of $37.2 billion and earnings of $1.82, both out-performing analyst expectations. Net income rose 30% compared to Q1 2020, reaching $13.9 billion.

Azure revenue grew 48%, while cloud services and server products increased 22% overall. Last quarter, Azure revenue grew 47% on 17% growth overall in that segment.

Dynamics products and cloud services revenue increased 19% (up 18% in constant currency) driven by Dynamics 365 revenue growth of 38%, while revenue for the broader Productivity and Business Processes segment was $12.3 billion and increased 11%. Last quarter, Dynamics revenue overall increased 13%, with Dynamics 365 revenue growth of 38%.

“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to invest against the significant opportunity ahead of us to drive long-term growth.”

Last quarter, Microsoft reported revenue to $38.0 billion and a fall in earnings per share to $1.46. In Q1 2020, the company reported revenue of $33.1 billion in FY20 Q1, delivering $1.38 earnings per share,

“Microsoft’s strong start to FY21 is not surprising given growing demand for cloud-based solutions like Microsoft Azure, Teams, and process automation technologies that help companies equip their staff to be productive from wherever they work," commented Dustin Grosse, Chief Marketing and Strategy Officer at Nintex.  

"In 2020, Azure made significant gains in the cloud market, and in 2021, as the cloud continues to flourish, Microsoft will continue to grow within the industry," said Gordon McKenna, CTO of Public Cloud at Ensono, a hybrid IT provider. "As more innovative tech, such as 5G, becomes more widely adopted in the enterprise and among consumers next year, Microsoft will be positioned favorably thanks to its existing relationships and dominance in the telco space."

Microsoft also reported strong revenue growth  from Xbox content and services, up 30%, and Surface revenue, which climbed 37%.

About Jason Gumpert

As the editor of MSDynamicsWorld.com, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at jgumpert@msdynamicsworld.com.

Prior to co-founding MSDynamicsWorld.com, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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