Microsoft Corporation Q3 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue reached $41.7 billion, up 19% year-over-year (16% in constant currency).
  • EPS was $1.95, increasing 39% year-over-year (34% in constant currency after tax adjustments).
  • Commercial Cloud revenue grew to $17.7 billion, up 33% year-over-year.
  • Commercial bookings grew 39% year-over-year, reflecting a rising mix of strategic, long-term Azure and enterprise-wide Microsoft Cloud deals.
  • Operating income grew 31% year-over-year with operating margins expanding to 41%.

Business Segment Performance

Productivity and Business Processes
  • Revenue: $13.6 billion, up 15% year-over-year.
  • Office 365 Commercial revenue grew 22% year-over-year, driven by seat growth and higher ARPU.
  • Office Commercial licensing declined 25% due to cloud migration (worse than expected).
  • Dynamics 365 revenue jumped 45% year-over-year, reflecting strong adoption across CRM and ERP workloads.
  • LinkedIn revenue increased 25%, with Marketing Solutions up 64% year-over-year as the advertising market improved.
Intelligent Cloud
  • Revenue: $15.1 billion, up 23% year-over-year.
  • Azure revenue grew 50% (46% in constant currency), better than expected, driven by strong consumption-based services.

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Operator: Greetings, and welcome to the Microsoft Fiscal Year 2021 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] And as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brett Iversen, General Manager, Investor Relations. Thank you. You may begin. Brett Iversen: Good afternoon, and thank you for joining us today. On the call with me are Satya Nadella, Chief Executive Officer; Amy Hood, Chief Financial Officer; Alice Jolla, Chief Accounting Officer; and Keith Dolliver, Deputy General Counsel. On the Microsoft Investor Relations website, you can find our earnings press release and financial summary slide deck, which is intended to supplement, our prepared remarks during today’s call and provides a reconciliation of differences between GAAP and non-GAAP financial measures. Unless otherwise specified, we will refer to non-GAAP metrics on the call. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the Company’s third quarter performance in addition to the impact these items and events have on the financial results. All growth comparisons we make on the call today relate to the correspondi

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