Microsoft’s financials look rosey for Q1 2020 thanks to Cloud and Office

Microsoft has published its Q1 2020 financials, and it paints a picture of a company in rude financial health. In all, revenue was up 14% to hit $33.1 billion while net income rose 21% to reach $10.7 billion.

There were a number of standouts in the numbers, mostly from the commercial side of the business. Server products and cloud services rose 30% year on year, with Azure the standout in a successful category, jumping up 59%. 

Office was another star of the show, with Office 365 boasting of a massive 35.6 million consumer subscribers, up from 32.5 million this time last year, leading to revenue growth of 5%. But it was even better for commercial subscriptions, where Microsoft now has 200 million subscribers for a 30% jump in revenue.

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“The world’s leading companies are choosing our cloud to build their digital capability,” said CEO Satya Nadella, welcoming the growth. “We are accelerating our innovation across the entire tech stack to deliver new value for customers and investing in large and growing markets with expansive opportunity.”

Of course, not everything can do as well as this, and these successes were covering for comparative weaknesses in other areas. While Nadella was keen to highlight that Minecraft was “stronger than ever”, gaming revenue overall dipped by 7%.

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At a glance, the Surface family seems to be a weak spot, dipping 4% during the quarter, but that’s actually not so bad when you consider this time last year Microsoft released the Surface Go. This time around, the new batch of Surfaces just missed the reporting window, so should be making a dent in the next report.

These (very) small blips aside, there’s no denying this has been an excellent quarter for the company, and with the next report taking in Christmas, Microsoft will be hoping that the consumer side will get a substantial uplift to close the year with a bang.

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