Microsoft FY19 Q3 earnings: $30.6 billion in revenue on cloud demand, solid Surface performance
Microsoft's earnings are looking up again, largely on the back of continued solid cloud growth, Surface performance, and Office 365.
Microsoft today announced its earnings for FY19 Q3, showing revenues of $30.6 billion and $8.8 billion in net income. That's an increase from the same period a year ago, in which Microsoft took in $26.8 billion in revenue and $7.4 billion in net income.
Here are the highlights from this quarter's release:
- Revenue was $30.6 billion and increased 14%
- Operating income was $10.3 billion and increased 25%
- Net income was $8.8 billion and increased 19%
- Diluted earnings per share was $1.14 and increased 20%
"Demand for our cloud offerings drove commercial cloud revenue to $9.6 billion this quarter, up 41% year-over-year," said Amy Hood, executive vice president and chief financial officer of Microsoft in the earnings release. "We continue to drive growth in revenue and operating income with consistent execution from our sales teams and partners and targeted strategic investments."
Windows, Surface, and gaming
For the largely consumer-facing side of Microsoft's business, all categories saw an upswing compared to the same period a year ago. Windows OEM revenue increased by 9 percent, while Windows Commercial products and cloud services saw an increase of 18 percent. Surface and gaming, meanwhile, were both up by 21 percent and five percent, respectively. Rounding things out is search advertising revenue, which increased by 12 percent.
Overall, this segment, which Microsoft' refers to as "More Personal Computing," brought in $10.7 billion, which was up eight percent over the same period in 2018.
Cloud and Office
Turning towards the company's cloud offerings, which continue to drive solid growth, Microsoft saw its revenues for its productivity and business offerings rise to $10.2 billion, up 14 percent over last year. The company's "Intelligent Cloud" business, meanwhile, increased by 22 percent to $9.7 billion.
Here are the highlights:
Office Commercial products and cloud services revenue increased 12% (up 14% in constant currency) driven by Office 365 Commercial revenue growth of 30% (up 31% in constant currency)
- Office Consumer products and cloud services revenue increased 8% (up 10% in constant currency) and Office 365 Consumer subscribers increased to 34.2 million
- LinkedIn revenue increased 27% (up 29% in constant currency) with record levels of engagement highlighted by LinkedIn sessions growth of 24%
- Dynamics products and cloud services revenue increased 13% (up 15% in constant currency) driven by Dynamics 365 revenue growth of 43% (up 44% in constant currency)
- Office Commercial products and cloud services revenue increased 12% (up 14% in constant currency) driven by Office 365 Commercial revenue growth of 30% (up 31% in constant currency)
- Server products and cloud services revenue increased 27% (up 29% in constant currency) driven by Azure revenue growth of 73% (up 75% in constant currency)
- Enterprise Services revenue increased 4% (up 5% in constant currency)
Once again, Microsoft will conduct a conference call and webcast to provide further insight into this quarter's numbers, along with a look forward, at 2:30 p.m. PT (5:30 p.m. ET). You can follow along at Microsoft's investor site.
Get the Windows Central Newsletter
All the latest news, reviews, and guides for Windows and Xbox diehards.
Dan Thorp-Lancaster is the former Editor-in-Chief of Windows Central. He began working with Windows Central, Android Central, and iMore as a news writer in 2014 and is obsessed with tech of all sorts. You can follow Dan on Twitter @DthorpL and Instagram @heyitsdtl.