Software giant reveals its FY20 Q1 financial results

Oct 24, 2019 06:27 GMT  ·  By

We’ve known for a while that cloud and Office have become the main engine powering Microsoft’s growth, and the most recent earnings report released by the company does nothing more than confirm this.

Microsoft says in its FY20 Q1 earnings release that revenue increased 14% to $33.1 billion, while the net income boosted 21% to reach $10.7 billion.

Unsurprisingly, Office and cloud had a major contribution to Microsoft’s strong quarter, and CEO Satya Nadella says more and more large companies choose their cloud products to “build their digital capability.”

Specifically, the Productivity and Business Processes unit, the one that includes Office, recorded a growth of 13%, with Office 365 Commercial revenue alone increasing 25%. When it comes to consumers, Office did well here too, and Microsoft says it now has no less than 35.6 million subscribers.

Windows OEM revenue up

The Intelligent Cloud unit also performed strong, reaching $10.7 billion in revenue, up no less than 27% year-over-year. Server products and cloud services revenue increased 30%, and Azure alone registered a boost of 59%.

The products that are the most important for consumers haven’t necessarily impressed during the quarter. The More Personal Computing unit as a whole recorded just a 4% increase with total revenue of $11.1 billion.

Windows OEM revenue increased 9%, while Surface dropped 4%. This is because Microsoft did not release any new Surface models during the quarter, but with new devices announced on October 2, the next quarter should bring massive growth for this division. Microsoft’s new Surface Pro 7 and Surface Laptop 3 are now available for purchase from the Microsoft Store.

Windows revenue is also expected to grow in the current quarter, as we’re approaching the end of support for Windows 7, which is currently the world’s second most-used desktop operating system. More enterprises are expected to purchase new hardware and upgrade to Windows 10 in the coming months.