Microsoft today reported earnings for its fourth fiscal quarter of 2019, including revenue of $33.7 billion, net income of $13.2 billion, and earnings per share of $1.71 (compared to revenue of $30.1 billion, net income of $8.9 billion, and earnings per share of $1.14 in Q4 2018). All three of the company’s operating groups saw year-over-year growth.
Analysts had expected Microsoft to earn $32.8 billion in revenue and report earnings per share of $1.08. The company thus handily beat expectations. The company’s stock was flat in regular trading, but up 1% in after-hours trading. Microsoft said it returned $7.7 billion to shareholders in the form of share repurchases and dividends during the quarter.
“It was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry,” Microsoft CEO Satya Nadella said in a statement. “Every day we work alongside our customers to help them build their own digital capability – innovating with them, creating new businesses with them, and earning their trust. This commitment to our customers’ success is resulting in larger, multi-year commercial cloud agreements and growing momentum across every layer of our technology stack.”
THREAD: $MSFT Q4 EARNINGS
Revenue: $33.7 billion ⬆️ 12%
Operating income: $12.4 billion ⬆️ 20%
Net Income: $13.2 billion GAAP and $10.6 billion non-GAAP ⬆️ 49% and 21% respectively
EPS: $1.71 pic.twitter.com/EDoZmk8mZL
— Microsoft (@Microsoft) July 18, 2019
The consistent quarterly success can be attributed to Nadella’s plan to turn Microsoft into a cloud company. In 2017, Microsoft’s cloud annualized run rate passed $20 billion, ahead of schedule. That number has now effectively doubled.
Operating group highlights
Here are the highlights across Microsoft’s three operating groups:
- Productivity and Business Processes: Up 14% to $11.0 billion. Office commercial revenue grew 14%, Office consumer and cloud revenue was up 6%, and Dynamics revenue increased 12%. LinkedIn revenue jumped a solid 25%. Office 365 consumer subscribers hit 34.8 million.
- Intelligent Cloud: Up 19% to $11.4 billion. Server products and cloud services revenue grew 22%, while Enterprise Services revenue increased 4%. The big number as always was Azure revenue, which jumped by 64%. Growth is slowing but still going.
- More Personal Computing: Up 4% to $11.3 billion. Windows OEM revenue was up 9%, while Windows commercial revenue increased 13%. Search advertising revenue minus traffic acquisition costs jumped 9%. Surface revenue increased by 14%, and gaming revenue declined 10% (Xbox was down 3%).
Nearly 35 million consumer subscribers of Office 365 is significant, but it naturally pales in comparison to the enterprise side. Microsoft has more than 180 million monthly active Office 365 business users.
More to follow