Microsoft brings home another solid quarterly

Microsoft has published the results of its second fiscal quarter 2020, concluded on December 31, 2019. The Redmond house confirms the positive trend of the previous quarters: revenue and operating income have once again increased every year. Compared to Q1 2020, in which the cloud and Office divisions had shone, there is a record step forward of Surface devices and the sale of Windows licenses. Cloud and Office are again the two bearing axes of Microsoft's activities. Division Xbox in trouble.

Q2 2020 IN BRIEF

Note: the percentages in brackets indicate the increase or decrease in value compared to the same period of the previous year):

revenue: $ 36.9 billion, + 14%
Operating income: $ 13.9 billion, + 35%
Net income: $ 11.6 billion, + 38% (GAAP) e + 36% (Non-GAAP)
Diluted earnings per share: $ 1.51, + 40% (GAAP) e + 37% (Non-GAAP)

The results of Microsoft's three macro areas of activity are summarized as follows:

Office, LinkedIn, Dynamics (Productivity and Business Process): $ 11.8 billion in revenue, + 17%
Azure, server and business products (Intelligent Cloud): $ 11.9 billion in revenue, + 27%
Surface, Windows, Xbox, Bing (More Personal Computing): $ 13.2 billion, + 2%

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SURFACE, WINDOWS AND XBOX MORE SIGN, EVIL XBOX

In the "More Personal Computing" section of the financial statements (it contains the results of the Surface, Windows, Xbox and advertising products) yes reports the increase in sales of Surface devices, thanks to the arrival of the new models introduced in the fall, namely Surface Laptop 3 13 and 15, Surface Pro 7 and Surface Pro X. It is an increase, says CFO Amy Hood, lower than expected – albeit objectively positive, especially when compared with the data of the previous quarter – and largely determined by the success of the Surface in the business environment.

Plus sign also for the activities attributable to the sales of the Windows licenses, thanks to the end of Windows 7 support which has pushed more and more users to switch to Windows 10 Xbox division who records one overall revenue drop of 21% – the new generation of consoles is still far away and, in the meantime, Revenues from the sale of content and services also drop. A partial consolation is the data of the record of Xbox Live users active monthly and that of the subscribers of the Xbox Game Pass service more than doubled during the quarter.

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Windows OEM, revenues + 18%
Windows Commercial products and cloud services, + 18%
Surface, revenues + 6%
Search advertising, revenues + 6%
Xbox (content and services), revenues -11%

CLOUD AND OFFICE ALWAYS GROWING

THE $ 12.5 billion in revenue generated by commercial cloud in the quarter (+ 39% on an annual basis) speaks volumes about the relevance of this business sector in Microsoft's overall financial statements. More in detail:

Server products and cloud services, revenues + 30% driven by Azure revenue increased by 62%
Enterprise services, revenues increased by 6%

Another plus sign for Office-related activities, LinkedIn and products Dynamics:

Office Commercial products and cloud services, revenue + 16%, driven by Office 365 Commercial revenue increased by 27%
Office Consumer products and cloud services, revenues + 19%, Office 365 Consumer users reached 37.2 million (they were 35.6 in the previous quarter)
LinkedIn, revenues + 24%
Dynamics products and cloud services, revenues + 12%