Microsoft Posts Another Monster Quarter

Posted on October 27, 2020 by Paul Thurrott in Microsoft with 21 Comments

Microsoft announced today that it earned a net income of $13.9 billion on revenues of $37.2 billion for the quarter ending September 30, increases of 30 percent and 12 percent, respectively, year-over-year (YOY).

“Demand for our cloud offerings drove a strong start to the fiscal year with our commercial cloud revenue generating $15.2 billion, up 31 percent year-over-year,” Microsoft CFO Amy Hood said in a prepared statement. “We continue to invest against the significant opportunity ahead of us to drive long-term growth.”

Microsoft’s three top-level business units, Intelligent Cloud, Productivity and Business Processes, and More Personal Computing, delivered $13 billion (up 20 percent), $12.3 billion (up 11 percent), and $11.8 billion (up 6 percent) in revenues, respectively.

Some key data from the quarter:

  • Server products and cloud services revenue increased 22 percent, driven by Azure revenue growth of 48 percent.
  • Server revenue declined 1 percent YOY.
  • The Enterprise Mobility installed base grew 27 percent to 152 million seats.
  • Office Commercial products and cloud services revenue increased 9 percent, driven by Office 365 Commercial revenue growth of 21 percent.
  • Office Consumer products and cloud services revenue increased 13 percent, while the Microsoft 365 consumer subscriber base increased to 45.3 million.
  • Windows revenues from PC makers decreased 5 percent.
  • Windows Pro revenues from PC makers grew 31 percent, driven by consumer (not commercial) demand.
  • Windows commercial products and cloud services increased 13 percent.
  • Gaming revenue grew 21 percent overall, but Xbox content and services revenue increased 30 percent.
  • Surface revenues increased 37 percent, with Microsoft citing “product launch timing” compared to the previous year, plus general PC demand.
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