Microsoft produced its most profitable quarter. Again.

On Tuesday, the company said revenue in the three months ended in September hit $45.3 billion, up 22% from a year earlier. Profit rose 48% to $20.5 billion.

The results surpassed analysts’ upbeat expectations, and shares were up slightly in after-hours trading.

The earnings were driven by success in Microsoft’s cloud-computing business, which includes Office 365 subscriptions and Azure. Sales of those products to commercial customers grew 36% in the quarter to $20.7 billion. Analysts said customers are signing bigger and longer contracts, sending Azure sales up 50% over the same period last year. The company, based in Redmond, said the demand was broad-based across industries and geographies.

Microsoft CEO Satya Nadella said in a statement that increasing the use of technology can be a “deflationary force in an inflationary economy,” arguing that digital tools can increase productivity and affordability.

That adoption of tech has been buoyed by the pandemic. “COVID has demonstrated how well the cloud works,” said Brad Reback, an analyst at the investment bank Stifel. Many organizations and large companies had long-term plans to move more to the cloud, but “COVID forced their hand for certain things to move faster. The success they have had with that has emboldened execs who are pro-cloud to be more aggressive,” he said.

And with strong hiring demand, LinkedIn’s revenue grew 42%. This summer, the company said that the professional social network produced more than $10 billion in annual sales.


Microsoft did feel some effect from the clogged global supply chain, particularly the shortage of some computer chips. The company said sales of its Windows operating system would have been higher had it not been for a shortage of new computers, although it still surpassed the company’s expectations with 10% growth.

But any blips there were more than outweighed by the strength of the company’s core enterprise business.

The profit benefited from $3.3 billion in one-time tax savings related to transferring intellectual property from Puerto Rico after closing operations there. Even without that gain, the company surpassed the record profit it produced just three months ago.

Microsoft Philanthropies underwrites some Seattle Times journalism projects.