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Microsoft’s Cloud Services Growth Continues

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Microsoft announced its earnings for its fiscal Q1 on October 26. The company posted 12% year-over-year growth in revenues to $24.5 billion. In our pre-earnings note, we noted that cloud services would boost revenues for the company. The company’s Commercial Cloud annualized revenue run rate exceeded $20 billion, ahead of schedule. The highlights from the earnings announcement are as follows:

Productivity and business process revenues grew by 28% to $8.2 billion. The growth in this vertical was driven by:

  • 10% growth in Office commercial product, which grew due to Office 365 commercial revenue growth of 42%. The Office 365 commercial subscriber base swelled to 120 million in Q1.
  • 12% growth in Office consumer products as Office 365 consumer subscribers increased to 28 million.
  • 13% growth in Dynamics products and cloud services as Dynamics 365 revenue grew by 69%.

Meanwhile, Intelligent Cloud revenue grew by 14% to $6.9 billion, due to the following factors:

  • 17% growth in Server products and Cloud services are driven by growth in Azure revenue, which increased by 90%
  • Enterprise Services revenue increased by 1%

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Article Credit: Forbes

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