Microsoft Q2 - Cloud Continues to Drive Growth

On the 29th of January 2020, Microsoft released another strong set of numbers where their cloud business Azure set another record earnings number as it closes the gap against Amazon Web Services. Microsofts' "second quarter" revenues were up 14% year-on-year to $36.9 billion and net income was $11.6 billion thanks to Surface and Office 365.

Microsoft Azure's top-line grew by 62%, a rebound from the previous quarter of 59% growth. The most high-profile win being the US Department of Defence contract dubbed project JEDI; a project worth up to $10 billion over a ten year period. Salesforce also announced that it will be using Azure for their Marketing Cloud service as it is the best in its class.

Office 365 now has over 37.2 million subscribers helping Office consumer and cloud revenues to shoot up 19% for the quarter, while Office commercial revenues were up 16%. Another worthwhile mention is LinkedIn which saw top-line growth of 24% thanks to recruiters spending more on the platform to secure the best candidates for the job. The whole Productivity and Business Processes division was up 17% to $11.8 billion.

The Intelligent cloud was up 27% to $11.9 billion with Server products and cloud services revenues surging by 30%. The big number there being Azure which saw growth of 62%. Personal Computing saw 2% growth to $13.2 billion even though the company stopped support for Windows 7, more people upgraded to Windows 10. Windows commercial was up 25% while gaming was down 11%.

We can see that Microsoft Office is still the cash cow of this company. Business users of Office 365 surpassed 200 million monthly active users and the consumer side of Office 365 saw those monthly active users cross 37.2 million as I wrote above. Microsoft continues to be innovative from software to the cloud and we love this business at Vestact.