Microsoft reported its fiscal third-quarter results on Wednesday, exceeding even Wall Street expectations from before the coronavirus outbreak.
In an earnings call, the company reported a profit of $10.75 billion, up 22 per cent from the same period last year, on sales of $35 billion.
Net income of $1.40 per share outperformed the analysts' expectations of $1.27 a share. Last year, the company had reported a profit of $1.14 per share on revenue of $30.57 billion for the third quarter.
We've seen two years' worth of digital transformation in two months, Satya Nadella
Microsoft said that its better-than-expected results were powered by strong demand for its Teams meeting app and Xbox gaming services as millions of people shifted to working and playing from home amid the coronavirus pandemic.
Covid-19 has had a minimal impact on the company's performance, according to Microsoft.
"We've seen two years' worth of digital transformation in two months," Microsoft CEO Satya Nadella said.
"From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security — we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything. Our durable business model, diversified portfolio, and differentiated technology stack position us well for what's ahead."
The demand for Microsoft was robust across product lines such as Azure, Teams and Windows Virtual Desktop. Windows revenue and Surface sales were also positive, the company said.
Office 365 now has 258 million paid seats, according to Microsoft, while the usage of Windows virtual desktop tripled in Q3 2020.
The company also reported a new milestone for Microsoft Teams, which now has 75 million daily active users, up 70 per cent from last month's figure of 44 million daily active users. The software giant also revealed that the number of daily active users for Teams increased by 110 per cent in the last four months. More than 18,300 educational institutes worldwide now use Teams, while 20 organisations with workforce of more than 100,000 also actively use the collaboration tool.
Commercial cloud revenue was $13.3 billion, up 39 per cent from the same period a year ago.
In the Productivity and Business Processes and Intelligent Cloud segments, the biggest increases in cloud usage were seen in Teams, Azure, Windows Virtual Desktop advanced security solutions and Power Platform with the shift to working from home.
In the Intelligent Cloud segment, which includes Azure, revenue increased 27 per cent to $12.28 billion, outperforming analysts' estimate of $11.87 billion.
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