Learn What IT Pros Need to Know About Windows 11 - August 26th at 1 PM ET! Learn What IT Pros Need to Know About Windows 11 - August 26th at 1 PM ET!
Main

Microsoft's Q2 Earnings Beat Estimates, Reinforce Office and Cloud Growth

It’s that time of the year again and Microsoft has released its earnings for Q2 fiscal / Q4 calendar and the company beat estimates for revenue and earnings per share. The company brought in $36.9 billion in revenue with $11.6 billion of that being Net Income.

Revenue in Productivity and Business Processes was $11.8 billion and increased 17% with the following business highlights:

  • Office Commercial products and cloud services revenue increased by 16% (up 18% in constant currency) driven by Office 365 Commercial revenue growth of 27%.
  • Office Consumer products and cloud services revenue increased 19% with continued growth in Office 365 Consumer subscribers to 37.2 million.
  • LinkedIn revenue increased by 24%.
  • Dynamics products and cloud services revenue increased 12%  driven by Dynamics 365 revenue growth of 42%.

Revenue in Intelligent Cloud was $11.9 billion and increased 27%, with the following business highlights:

  • Server products and cloud services revenue increased 30% driven by Azure revenue growth of 62%.
  • Enterprise Services revenue increased 6%.

Revenue in More Personal Computing was $13.2 billion and increased 2% (, with the following business highlights:

Sponsored Content

Read the Best Personal and Business Tech without Ads

Staying updated on what is happening in the technology sector is important to your career and your personal life but ads can make reading news, distracting. With Thurrott Premium, you can enjoy the best coverage in tech without the annoying ads.

  • Windows OEM revenue increased 18% (up 18% in constant currency)
  • Windows Commercial products and cloud services revenue increased by 25%.
  • Surface revenue increased by 6%.
  • Search advertising revenue excluding traffic acquisition costs increased by 6%.
  • Xbox content and services revenue decreased by 11% (down 9% in constant currency).

Even though Azure’s growth percentage continues to decline, previous years it was above 100%, the volume of revenue it brings in, continues to climb. Microsoft continues to focus on this pillar of growth as the company (and its investors know) that cloud computing is the long-term future of the organization.

For Office, growth looks to continue to climb with 37.2 million consumer subscriptions and a 19% increase in commercial customer revenue. At this time, the Office cash-cow shows little sign of slowing down anytime soon and continues to be a very bright spot in the company’s SaaS model.

For Windows, it would appear that the end of Windows 7 has had a positive impact on Microsoft’s financials with the company saying that OEM revenue climbed 18%, likely on the back of new PCs being purchased at the end of 2019 to replace older Windows 7 devices. And Surface nearly cracked the $2 billion mark with $1.976 billion in revenue during the quarter.

Overall, Microsoft had a healthy quarter and showed growth in all the right places; at the time of posting, the stock was up around 2% in after-hours trading.

Related Topics:

BECOME A PETRI MEMBER:

Don't have a login but want to join the conversation? Sign up for a Petri Account

Register
Comments (0)

Leave a Reply

Brad Sams has more than a decade of writing and publishing experience under his belt including helping to establish new and seasoned publications From breaking news about upcoming Microsoft products to telling the story of how a billion dollar brand was birthed in his book, Beneath a Surface, Brad is a well-rounded journalist who has established himself as a trusted name in the industry.

Register for Advanced Microsoft 365 Day!

GET-IT: Advanced Microsoft 365 1-Day Virtual Conference - Live August 24th!

Join us on Tuesday, August 24th and hear from Microsoft MVPs and industry experts about how to take advantage of Microsoft 365 at a technical level and dive deep into the features and functionality that will make your environment more secure and compliant.

RSVP Now

Sponsored By