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

Microsoft today announced its earnings for FY19 Q1, 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.