Cloud, Office boost Microsoft's September quarter profit by 21% to $10.7 bn

Riding on its commercial Cloud and Office business, Microsoft has posted $33.1 billion in revenue with $10.7 billion in net income (an increase of 21 per cent) for its first quarter of fiscal year 2020.

The tech giant returned $7.9 billion to shareholders in the form of dividends and share repurchases in the first quarter of fiscal year 2020 -- an increase of 28 per cent compared to the first quarter of fiscal year 2019.

"The world's leading companies are choosing our cloud to build their digital capability. We are accelerating our innovation across the entire tech stack to deliver new value for customers and investing in large and growing markets with expansive opportunity," Microsoft CEO Satya Nadella said in a statement late Wednesday.

The company reported $11.1 billion in revenue for productivity and business processes -- up 13 per cent.

Office Commercial products and cloud services revenue increased 13 per cent, driven by Office 365 Commercial revenue growth of 25 per cent.

Revenue in Intelligent Cloud was $10.8 billion and increased 27 per cent. Server products and cloud services revenue increased 30 per cent, driven by Azure revenue growth of 59 per cent.

"It was a strong start to the fiscal year with our commercial cloud generating $11.6 billion in revenue for the quarter, up 36 per cent year over year," said Amy Hood, executive vice president and chief financial officer of Microsoft.

Office consumer products and cloud services revenue increased 5 per cent, with continued growth in Office 365 Consumer subscribers to 35.6 million. Office 365 commercial monthly active users surpassed 200 million this quarter.

LinkedIn revenue increased 25 per cent.

"Marketing Solutions remains our fastest growing segment, up 44 per cent year-over-year, as marketers leverage our community-based tools to connect with LinkedIn, nearly 660 million members," said Nadella.

Revenue in aMore Personal Computing' was $11.1 billion and increased 4 per cent. Windows OEM revenue increased 9 per cent while Windows commercial products and cloud services revenue increased 26 per cent.

Significantly, Surface laptop revenue decreased 4 per cent despite Microsoft launching new products in the category.

"Earlier this month, we unveiled our broadest Surface lineup to date, including two new dual screen devices coming next year. We are reimagining every layer with how we infuse AI from silicon up to device form factors and the role of operating systems to help people be more productive and creative in a multi-sense, multi-device world," explained Nadella.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel