Microsoft announced its Q3 2019 earnings report yesterday and once again the data shows the company is thriving. Not only that, Microsoft bested analyst predictions again, which it has done over 75% of quarters over the last two years. On news of its latest results, the company's stock surged to a record high market cap of over $1 trillion.
The company's Q3 2019 earnings show total revenue of $30.6 billion (up from $26.9 billion a year ago) and net income of $8.8 billion (up $7.4 billion YoY). A bubble of rejuvenation that has surrounded Microsoft under CEO Satya Nadella shows zero signs of bursting.
Thanks to another landmark quarter, the company's stock soared to over $130 per share, a record amount. Cloud continued to drive Microsoft's growth, but all areas performed well, including a boost for Windows.
“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 during the Q3 2019 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 Xbox
Last quarter, Windows showed a slight decline, which Microsoft attributed to a chip shortage. This did little to harm the company's overall performance as Windows is no longer carries Microsoft. However, no doubt Redmond will be happy to see Windows return to growth in Q3.
Windows OEM revenue jumped 9 percent year-on-year during fiscal Q3, while Windows Commercial increased 18 percent.
Other consumer-facing services also performed well. Microsoft reports Surface revenue grew a healthy 21 percent. This shows the company's long term commitment to its hardware brand continues to pay off. Likewise Gaming and Xbox, which increased five percent through a traditionally quiet time of the year.
Microsoft lists this consumer category as “More Personal Computing” and combined it drew $10.7 billion in revenue, an eight percent YoY jump.
Cloud and Office
Of course, cloud has been the driver of Microsoft's resurgence in recent years. Nadella's cloud first strategy has helped Microsoft reach new revenue heights. It has now also allowed the company to join Amazon and Apple in the trillion dollar club.
Revenue for productivity and business services increased to $10.2 billion, a 14 percent increase compared to the same frame in 2018. As for “Intelligent Cloud”, it scored a 22 percent growth to $9.7 billion revenue.
- 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)