Following a record year, Microsoft started its 2019 fiscal year off strong, cruising past Wall Street expectations.
The tech giant brought in $8.8 billion in net profits — or $1.14 per share — on $29.1 billion in revenue. Analysts surveyed in advance expected Microsoft to post earnings of $0.96 per share on revenue of $27.9 billion in revenue.
“We are off to a great start in fiscal 2019, a result of our innovation and the trust customers are placing in us to power their digital transformation,” Microsoft CEO Satya Nadella said in a statement. “We’re excited to help our customers build the digital capability they need to thrive and grow, with a business model that is fundamentally aligned to their success.”
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In the company’s Productivity and Business Processes division, which includes Office 365 and LinkedIn, revenue increased 19 percent over last year to $9.8 billion.
- Intelligent Cloud revenue was up 24 percent to $8.6 billion, powered by 76 percent annual revenue growth from Azure.
- Revenue in the company’s More Personal Computing division, which includes its Windows PC business, Surface products and gaming teams jumped 15 percent over last year to $10.7 billion.
LinkedIn revenue grew 33 percent over a year ago, but this quarter Microsoft has stopped reporting the revenue number and profits/losses as it folds the business social network into its organization. A year ago, LinkedIn brought in $1.46 billion in revenue. A 33 percent increase year-over-year increase would bring revenue in the most recent quarter to just shy of $1.95 billion.
GitHub revenue will begin to show up included in Microsoft’s next quarterly financial release. Microsoft disclosed that the $7.5 billion deal to acquire the code repository will close by the end of October.
Surface revenue jumped 14 percent to $1.18 billion in revenue for the quarter. This quarter’s numbers don’t take into account any revenue from the flurry of new devices Microsoft announced at earlier this month. Microsoft unveiled the latest versions of the Surface Pro tablet and Surface Laptop and showed off a set of $349 Surface headphones at the event in New York City.
It’s been a busy quarter for Microsoft. The company held its annual Ignite conference for IT pros and developers in Orlando in September and announced a flurry of new products, services and hardware.
Microsoft announced one of its biggest alliances in recent history in July, teaming up with Walmart in a five-year deal that will focus on a “a broad set of cloud innovation projects,” covering both Azure and Office 365. Walmart is perhaps Amazon’s biggest retail rival, and Microsoft is battling the tech giant in the cloud.
Despite their competition, Amazon and Microsoft have found common ground in a couple areas. The tech giants rolled out the first integrations between their digital assistants Alexa and Cortana during the quarter. Microsoft also added voice commands for Alexa and Cortana to Xbox.
And all of that activity comes as Microsoft is preparing to renovate its massive Redmond, Wash. headquarters campus. Microsoft also recently announced plans for a new $570 million Canadian headquarters in Toronto, joining other tech giants like Google and Uber in planting flags in the city.