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Hood called for an acceleration in Windows sales to device manufacturers in the fiscal second quarter, with a growth rate reaching the "low to mid teens." The company saw strength in sales of commercial PCs in particular, Hood said on a conference call.
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Still, sales of Windows to device makers rose 10%, and Microsoft said PC supply constraints impacted that business. PC shipments grew 1% in the third quarter, according to an estimate from technology industry researcher Gartner. The number is above the $12.72 billion consensus. The company's More Personal Computing business, including Windows, devices, gaming and search advertising, posted $13.31 billion in revenue, up 12%. The Productivity and Business Processes unit, which includes Dynamics, LinkedIn and Office, contributed $15.04 billion in revenue, up 22% and over the $14.67 billion StreetAccount consensus estimate.
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On Tuesday Hood said that for the fiscal second quarter, "we expect healthy broad-based growth in our Azure consumption business consistent with recent trends and our user business, while continuing to benefit from Microsoft 365 momentum to see a moderation of growth rates given the size of the install base." Microsoft does not disclose Azure revenue in dollars. This time around Azure growth was 48% in constant currency, above the 45% figure in the prior quarter. Amy Hood, the company's finance chief, called for Azure growth to be relatively stable in constant currency.
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The result was more robust than Microsoft itself had predicted three months ago.