Microsoft CEO Satya Nadella. (GeekWire File Photo / Kevin Lisota)

Microsoft posted quarterly revenue of $45.3 billion, up 22%, beating Wall Street’s expectations, driven by continued strength in its cloud business.

Profits for the quarter ended Sept. 30 were $20.5 billion, up 48%, with earnings per share of $2.71, but that included an unusual tax benefit of $3.3 billion from what the company described as the transfer of “certain intangible properties” from its Puerto Rico subsidiary to the United States.

Without that benefit, profits were $17.2 billion, still up 24%, with earnings per share of $2.27, topping Wall Street’s expectations of $2.07 per share.

Microsoft CEO Satya Nadella addressed broader economic trends in the company’s earnings release, calling digital technology “a deflationary force in an inflationary economy,” describing technology as a means for businesses to “improve productivity and the affordability of their products and services.”

Microsoft Cloud record: Revenues for Microsoft Cloud, previously known as Commercial Cloud, rose 36% to $20.7 billion, exceeding $20 billion in a quarter for the first time in the company’s history.

Microsoft Cloud, previously known as Commercial Cloud, is a measure that includes “Azure and other cloud services, Office 365 Commercial, the commercial portion of LinkedIn, Dynamics 365, and other commercial cloud properties,” as defined by the company.

LinkedIn results: Revenue generated by LinkedIn rose 42% to $3.14 billion for the quarter. Microsoft said the result was driven by growth of 61% in LinkedIn’s Marketing Solutions business, which companies use to generate sales leads, website traffic and sales.

Xbox and Surface: Gaming revenue was up 16% to $3.6 billion due to Xbox hardware growth.

Surface revenue declined 17% to $1.3 billion. Windows 11 and Microsoft’s new Surface devices didn’t launch until after the quarter ended.

Microsoft’s Intelligent Cloud division saw the biggest growth of the three main divisions used by the company for financial reporting, jumping 31% to $17 billion in revenue, fueled by revenue growth of 50% in the company’s Azure cloud platform and related services.

Operating profit in Intelligent Cloud was up 39% to $7.6 billion.

Productivity and Business Processes revenue rose 22% to $15 billion, led by 23% growth in Office 365 commercial revenue and 48% growth in Dynamics 365 revenue growth.

Operating profit for Productivity and Business Processes rose 33% to $7.6 billion.

More Personal Computing, which includes Windows and related products, posted revenue of $13.3 billion, up 12%. Drivers of that growth included Windows OEM and Commercial revenue, which the company attributed in part to higher revenue per commercial Windows license.

Operating profits in More Personal Computing fell 7% to $5.1 billion.

Follow-up: Microsoft adds 23k employees in one year, growing 14% despite pandemic and tight labor market

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