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Microsoft Q4 Revenue $33.7B Up 12%, Commercial Cloud Up 39% to $11B

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7/18/2019
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REDMOND, Wash. -- Microsoft Corp. today announced the following results for the quarter ended June 30, 2019, as compared to the corresponding period of last fiscal year:

  • Revenue was $33.7 billion and increased 12%
  • Operating income was $12.4 billion and increased 20%
  • Net income was $13.2 billion GAAP and $10.6 billion non-GAAP, and increased 49% and 21%, respectively
  • Diluted earnings per share was $1.71 GAAP and $1.37 non-GAAP, and increased 50% and 21%, respectively
  • GAAP results include a $2.6 billion net income tax benefit explained in the Non-GAAP Definition section below

"It was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry," said Satya Nadella, chief executive officer of Microsoft. "Every day we work alongside our customers to help them build their own digital capability - innovating with them, creating new businesses with them, and earning their trust. This commitment to our customers' success is resulting in larger, multi-year commercial cloud agreements and growing momentum across every layer of our technology stack."

The following table reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

The current quarter effective tax rate was (5)% and 16% on a GAAP and non-GAAP basis, respectively. GAAP results include a net income tax benefit of $2.6 billion for the fourth quarter of fiscal year 2019 and a net income tax benefit of $104 million for the fourth quarter of fiscal year 2018. These net tax benefits are excluded from our non-GAAP results and explained in the Non-GAAP Definition section below.

Microsoft returned $7.7 billion to shareholders in the form of share repurchases and dividends in the fourth quarter of fiscal year 2019.

"Q4 commercial cloud revenue increased 39% year-over-year to $11.0 billion, driving our strongest commercial quarter ever," said Amy Hood, executive vice president and chief financial officer of Microsoft.

Revenue in Productivity and Business Processes was $11.0 billion and increased 14% (up 17% in constant currency), with the following business highlights:

  • Office Commercial products and cloud services revenue increased 14% (up 16% in constant currency) driven by Office 365 Commercial revenue growth of 31% (up 34% in constant currency)
  • Office Consumer products and cloud services revenue increased 6% (up 8% in constant currency) and Office 365 Consumer subscribers increased to 34.8 million
  • LinkedIn revenue increased 25% (up 28% in constant currency) with record levels of engagement highlighted by LinkedIn sessions growth of 22%
  • Dynamics products and cloud services revenue increased 12% (up 15% in constant currency) driven by Dynamics 365 revenue growth of 45% (up 48% in constant currency)

Revenue in Intelligent Cloud was $11.4 billion and increased 19% (up 21% in constant currency), with the following business highlights:

  • Server products and cloud services revenue increased 22% (up 24% in constant currency) driven by Azure revenue growth of 64% (up 68% in constant currency)
  • Enterprise Services revenue increased 4% (up 6% in constant currency)

Revenue in More Personal Computing was $11.3 billion and increased 4% (up 6% in constant currency), with the following business highlights:

  • Windows OEM revenue increased 9% (up 9% in constant currency) 
  • Windows Commercial products and cloud services revenue increased 13% (up 16% in constant currency) 
  • Surface revenue increased 14% (up 17% in constant currency) 
  • Search advertising revenue excluding traffic acquisition costs increased 9% (up 10% in constant currency)
  • Gaming revenue declined 10% (down 8% in constant currency) with Xbox software and services revenue down 3% (down 1% in constant currency) 

Fiscal Year 2019 Results

Microsoft Corp. today announced the following results for the fiscal year ended June 30, 2019, as compared to the corresponding period of last fiscal year:

  • Revenue was $125.8 billion and increased 14%
  • Operating income was $43.0 billion and increased 23%
  • Net income was $39.2 billion GAAP and $36.8 billion non-GAAP, and increased 137% and 22%, respectively
  • Diluted earnings per share was $5.06 GAAP and $4.75 non-GAAP, and increased 138% and 22%, respectively
  • GAAP results include a $2.6 billion net income tax benefit explained in the Non-GAAP Definition section below

Microsoft Corp. (Nasdaq: MSFT)

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