Microsoft FY19 Q1 earnings: $29.1 billion in revenue with cloud, gaming, and Surface on the up

By Dan Thorp-Lancaster
published

Microsoft's revenue is once again up year-over-year as the strength of its cloud and Office businesses continues to shine.

Microsoft logo
Microsoft logo (Image credit: Windows Central)

Microsoft today announced its earnings for FY19 Q1 (opens in new tab), showing revenues of $29.1 billion and $8.8 billion in net income. That marks an increase from the same period a year ago, during which Microsoft took in $24.5 billion in revenue and $6.6 billion in net income.

Here are the highlights from this quarter's release:

  • Revenue was $29.1 billion and increased 19%
  • Operating income was $10.0 billion and increased 29%
  • Net income was $8.8 billion and increased 34%
  • Diluted earnings per share was $1.14 and increased 36%

"Our record results for Q1 reflect our commitment to long-term strategic investments and consistent execution to drive revenue growth and operating margin expansion," said Amy Hood, executive vice president and chief financial officer of Microsoft. "We see continued demand for our cloud offerings, reflected in our commercial cloud revenue of $8.5 billion, up 47% year over year."

Cloud and Office

Microsoft's cloud efforts continue to be a focal point for its continued growth, accounting for a significant portion of its revenues this quarter. In particular, Intelligent Cloud revenue was up by 20 percent to $8.6 billion, while Windows commercial products and cloud services revenue also saw an increase of 12 percent.

Office also continues to be a strong point, with Productivity and Business Processes netting $9.8 billion in revenue. That's up by 19 percent, powred largely by significant growth in Office 365, LinkedIn, and Dynamics 365. Here are the highlights:

  • Office commercial products and cloud services revenue increased 17% (up 16% in constant currency) driven by Office 365 commercial revenue growth of 36% (up 35% in constant currency)
  • Office consumer products and cloud services revenue increased 16% (up 17% in constant currency) with continued growth in Office 365 consumer subscribers to 32.5 million
  • LinkedIn revenue increased 33% (up 33% in constant currency) with record levels of engagement highlighted by LinkedIn sessions growth of 34%
  • Dynamics products and cloud services revenue increased 20% (up 20% in constant currency) driven by Dynamics 365 revenue growth of 51% (up 49% in constant currency)

Windows, Surface, and gaming

Interestingly, on the consumer side of things, gaming and Surface are showing signs of strength. Gaming revenue as a whole was up by 44 percent, with Xbox software and services revenue in particular garnering growth of 36 percent. Surface, meanwhile, saw revenues increase by 14 percent.

Windows OEM revenue, meanwhile, only saw a bump of three percent. The largest factor in that increase specifically was Windows OEM Pro, which saw revenues rise by eight percent.

Dan Thorp-Lancaster
Dan Thorp-Lancaster

Dan Thorp-Lancaster is the Editor in Chief for Windows Central. He began working with Windows Central as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl. Got a hot tip? Send it to daniel.thorp-lancaster@futurenet.com.

17 Comments
  • Xbox Game Pass seems to be a huge success
  • Nice job on Fox Business, Daniel! Unfortunately you were muted the first few seconds of talking. But good stuff! :)
  • Thanks. Yeah, plus the market nosediving seemed to be a bigger concern at the moment :P
  • Yeah, it sure was. haha. Losing the entire year's worth of growth in one day is probably not the day I would want to be on with them. lol.
  • It's amazing how much Microsoft gaming division is bashed by some people because of the Playstation 4's dominance, yet they fail to realize how much money Microsoft is still making, even being behind Sony. They're still raking in billions of dollars. Just imagine what the cash flow would be like if they had sold as many consoles as Sony.
  • Yeah your spot on but this is why Microsoft have opened up its exclusives up to pc to as they know the money is in software and services. I see game pass being offered to pc users the start of next gen where the picking of games will be even bigger.
  • MS is so much bigger than Sony as a whole. Gaming is just a drop in the bucket for MS. Just look up Forbes for info on these companies. Not even close.
  • Indeed. Some people seem to think that it is a crime not to be #1. Being #2 in an industry worth billions is still rather lucrative. It's also worth considering that, whatever their motivations, Microsoft has actually had a positive impact on the gaming industry for gamers in that Sony looks like they may be relenting as far as cross-play is concerned.
  • This is very common in business. This is know as milking the cow! It requires no extra effort. But the important thing is identifying the question marks.
  • Nope. Things like Azure are growing like crazy. I've been in Microsoft's offices, and even their own staff can't keep up with the rate of additional new features in Azure, or upgrades to them. The cloud pace is insane at MS. I gaurantee they will post even insaner numbers next year, due to the rush to get onto Win10 due to Win7 support dropping. Many will move to 365 (E1 and E3 plans mostly). It will be cha-ching in the virtual cash registers in Seattle.
  • Lets use some of that money to get proper Windows team and QA team.
  • but but MS, windows 10, xbox and surfaces are falling apart!!! /s
  • Can we get some damn love from IOS tablet app developers though.......... The tablet app department is still lacking!
  • Microsoft needs to sell some tablets first.
  • Microsoft will never sell iOS tablets.
  • So they will never entice developers to create touch apps.
  • Xbox hardware was up 96% year to year geez