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Microsoft Is Now a $100 Billion Company

Microsoft blasted past the $100 billion revenue milestone for its recently finished fiscal year.

Financial results released after markets closed on Thursday showed revenues of $110.36 billion for the full year ended June 30, a 14% jump compared to the $96.57 billion in revenues the previous year.

"We had an incredible year, surpassing $100 billion in revenue as a result of our teams' relentless focus on customer success and the trust customers are placing in Microsoft," said CEO Satya Nadella in a statement accompanying the financial results. Nadella called out the company's early investments in intelligent cloud and intelligent edge as paying off.

CFO Amy Hood added that sales execution and commercial cloud revenue growth were key to strong results in the fourth quarter.

For Q4, Microsoft reported a 17% revenue gain to $30.1 billion and earnings per share of $1.13. Both figures beat analyst expectations and the stock was up slightly in after-hours trading.

Earlier in the week at the Microsoft Inspire conference for partners, company officials modeled estimates of total Microsoft ecosystem value, including partner revenues, based on a Microsoft annual revenue base of $100 billion.

By major business units, the fourth quarter revenue was up 13% to $9.7 billion in Productivity and Business Processes, up 23% to $9.6 billion in Intelligent Cloud, and up 17% to $10.8 billion in More Personal Computing.

Among the more granular product and service highlights:

  • Commercial cloud gains were slightly less impressive than the previous sequential quarter. This business was up an impressive 53% year over year, but the figure was 58% for the third quarter. Commercial cloud revenues totaled $6.9 billion and include commercial versions of Office 365, Dynamics 365 and the Azure public cloud.

    Azure revenues on their own were up 89%, Dynamics 365 revenues were up 61% and Office 365 commercial revenues were up 38%.

  • Windows OEM revenue was up 7%, driven by 14% growth on the OEM Pro side and offset by a 3% drop on the non-Pro side. Revenues for Surface shot up 25%, with Microsoft noting that new editions are faring well against a low prior-year comparable. For the full year, the Surface unit generated $4.6 billion in revenues.

  • Enterprise services revenues also tell an interesting story in the fiscal year. Always a point of interest for channel partners who often compete with Microsoft consultants, the service business over the past fiscal year has seen steady growth. In fiscal year 2017, enterprise services posted a 2% decline in revenues compared to the year before. Yet for FY18, revenues were up 1% in Q1, 5% in Q2, 8% in Q3 and 8% again in Q4. For the full year, enterprise service revenues increased 5%.

Posted by Scott Bekker on July 19, 2018 at 2:46 PM


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