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Microsoft Q1 earnings: $33.1 billion in revenue as the cloud continues to shine

Microsoft logo at Ignite
Microsoft logo at Ignite (Image credit: Windows Central)

What you need to know

  • Microsoft reported $33.1 billion in revenue for the first quarter of its 2020 fiscal year
  • That's up 14 percent year-over-year, largerly boosted by its cloud and commercial businesses.
  • Surface and gaming revenues were down for the quarter.

Microsoft issued its first quarter earnings report (opens in new tab) for its 2020 fiscal year today, reporting overall revenues of $33.1 billion. That's up 14 percent over the same period last year, during which the company reported revenues of $29.1 billion.

The upswing was, once again, largely powered by a strong cloud and commercial business, as has become a trend for Microsoft in recent years. Specifically, revenues in Microsoft's Intelligent Cloud business were up 27 percent to $10.8 billion, while Productivity and Business processes increase 13 percent to $11.1 billion. The former covers Microsoft's server and enterprise services, while the latter encompasses Office products and cloud services, as well as LinkedIn and Dynamics.

Overall, Microsoft's More Personal Computing category, which covers gaming, Windows, and Surface revenue, saw a bump of four percent to $11.1 billion. That's largely due to a solid quarter for Windows OEM revenue, Windows cloud services and commercial products, and search revenue.

Microsoft delivers a strong FY20 Q1 for Windows 10 commercial ahead of Windows 7's demise

There were a couple of weak point for the quarter, however. Surface revenues dipped four percent as Microsoft moved into its transition period ahead of the launch of Surface Pro 7 and Surface Laptop 3. It will be interesting to see if their launch, as well as the upcoming launch of the Surface Pro X, will give a significant boost to Microsoft's Q2 results.

Microsoft Surface revenue dipped 4 percent in FY20 Q1 results

Likewise, gaming revenues were down by seven percent. In its guidance last quarter, Microsoft said it expected this downturn as console sales continued to decline. Xbox content and services revenue remained flat year-over-year, however.

Microsoft gaming revenue declined 7 percent last quarter

Microsoft will hold a conference call at 5:30 p.m. ET, where it will discuss each business segment in more depth.

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.