Bonkers Azure bookings give Microsoft a record-breaking $110bn year

Satya's got sunshine on a cloudy day

Satya Nadella
One happy CEO ... Satya Nadella

Microsoft has closed out a massive fiscal 2018 that saw the Redmond giant lay claim to more than $110bn in total revenue.

Azure and its cloud compute operation was singled out in Redmond's financial figures – released on Thursday – as one of Microsoft's top performers both in the full year and the past three months. Here's a summary of the fourth and final quarter of its fiscal 2018, ended June 30:

  • Revenues of $30.1bn were up 17 per cent from $25.6bn in Q4 2017.
  • Net income was $8.9bn, up 10 per cent from $8.0bn in the year-ago quarter.
  • Non-GAAP earnings per share was $1.13 up from $1.06 year-over-year and topping analyst estimates of $1.08.
  • Productivity and Business Processes were $9.7bn, up 10 per cent. Office commercial revenues were up 8 per cent, while Office consumer revenues were up 6 per cent. LinkedIn revenues were up 34 per cent.
  • Intelligent Cloud revenues were $9.6bn, up 20 per cent. Server business revenues were up 24 per cent. Azure revenues were up 89 per cent, while enterprise services was up 7 per cent.
  • The More Personal Computing group logged $10.8bn in revenues up 16 per cent from the year-ago quarter. Windows OEM revenues were up 7 per cent, while commercial products and cloud services revenues were up 23 per cent. Microsoft's gaming revenues were up 38 per cent, and Surface revenue was up 21 per cent, search revenues were up 16 per cent.

Results from the full 2018 fiscal year were also strong:

  • Revenue of $110.4bn was up 14 per cent from $96.6bn in FY2017.
  • Net income of $16.6bn was down 34 per cent from $25.5bn last year, thanks in large part to a $13.7bn one-time charge from America's tax shakeup. That hit was from bringing back to the US tens of billions of dollars in previously recorded profits held overseas, under President Trump's taxation overhaul. Leaving out that charge, operating income was $35.1bn this year, up 17 per cent on $29bn last year.
  • Non-GAAP earnings per share were $3.88, up from $3.29 last year.
  • Productivity and Business Processes revenues of $35.9bn were up 17 per cent from $29.9bn in FY 2017.
  • Intelligent Cloud revenues in 2018 were $32.2bn, a 15 per cent improvement from $27.4bn last year.
  • More Personal Computing logged $42.2bn in revenues on the year, up 7 per cent from $39.3 the prior year – every quarter of the year, the Surface line hauled in $1bn in sales, we noted.

"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,” Microsoft CEO Satya Nadella gushed.

"Our early investments in the intelligent cloud and intelligent edge are paying off, and we will continue to expand our reach in large and growing markets with differentiated innovation."

Speaking to financial analysts on a conference call, Nadella made a point of praising Azure, noting Microsoft's recently signed mega-deal with Walmart to provide all of the cloud backend for the US big-box behemoth.

Nadella also noted that Azure was doing well with its on-premises Azure Stack offering and its connections to Windows Server.

"Our hybrid value proposition has continued to resonate, so there are a bunch of workloads that are migrating to the cloud," the Microsoft boss said. "People are looking basically to lift and shift a lot of their datacenter workloads."

Microsoft shares were up 3.45 per cent in after-hours trading at $108. ®




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