SAN FRANCISCO, July 20, 2018 (BSS/AFP) – Microsoft on Thursday said its
revenue and profit climbed in the recently ended quarter, getting results
from its bets on cloud computing services and artificial intelligence.
The US tech giant reported its net income increased 10 percent to $8.8
billion on revenue that was up 17 percent to $30.1 billion when compared with
the same period last year.
Microsoft saw revenue gains across its full range of businesses including
business services, gaming, internet search ads, its consumer software
including Windows and Office and LinkedIn, the recently acquired professional
social network.
Shares were up more than three percent to $107.80 in after-hours trading
following the release of earnings for the quarter ending the fiscal year
quarter for Microsoft.
“We had an incredible year,” chief executive Satya Nadella said in a
release.
“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.”
Microsoft executives told analysts they expected another year of growth,
with demand for computing on the rise and the technology giant well-
positioned in that market.
“We’re investing aggressively to build Azure as the world’s computer,”
Nadella said, referring to Microsoft’s cloud computing platform that competes
with services run by Amazon and Google.
“We expanded our global data center footprint to 54 regions, more than any
other cloud provider.”
Despite continuing to invest in promising trends from cloud computing and
artificial intelligence to gaming, Microsoft expected its profit margins to
improve.
– ‘Super solid’ –
Revenue in a productivity and business processes category that included
career-focused social network LinkedIn was up 13 percent in the quarter to
$9.7 billion, according to Microsoft.
LinkedIn revenue increased 37 percent as usage soared, the earnings release
indicated. LinkedIn has seen record levels of postings seeking employees due
to a robust US job market, according to Microsoft chief financial officer Amy
Hood.
Microsoft bought LinkedIn two years ago in a deal valued at $26.2 billion.
Global Equities Research analyst Trip Chowdhry described Microsoft earnings
and its financial path as “super solid,” noting that revenue and earnings per
share beat market expectations.
Microsoft reported net income of $16.6 billion for the fiscal year on
revenue that rose 14 percent to $110.4 billion.
Analyst Patrick Moorhead at Moor Insights & Strategy said Microsoft’s
results showed healthy growth.
“The company drove double-digit revenue growth in every business, which
demonstrates to me the firm’s balance,” Moorhead said. “Satya Nadella and
team are hitting on all cylinders at this point.”
In a major deal announced this week, Microsoft and Walmart unveiled a
strategic partnership to help the retail giant ramp up its efforts against
Amazon.
“I’m especially proud that Walmart chose Azure and Microsoft 365 to
accelerate its digital transformation for their associates and customers,”
Nadella said during the earnings call.
Microsoft has announced technology partnerships with other major firms in
recent months including General Electric, Starbucks, Bayer, Spain’s
Telefonica and sports organizations such as the NBA and PGA.
– Outside the Windows –
Moves into business services and cloud computing have reduced Microsoft’s
dependence on Windows, the dominant software for personal computers that has
been overtaken in the consumer market by mobile devices powered by Google or
Apple software.
Microsoft has taken to offering software such as Office as subscription
services hosted online, even providing applications for Android or Apple
mobile devices.
Nadella said Office 365 has more than 135 million users, and that a mobile
version of Outlook is used on more than 100 million devices powered by
Android or Apple software.
Microsoft 365 is now a multibillion dollar business, according to Nadella.
Microsoft expected that by the end of this calendar year it would close a
$7.5-billion stock acquisition of software development platform GitHub.
Created in 2008, GitHub allows developers to cooperatively manage software
and has more than 28 million users around the world.
“With GitHub we recognize the increasingly vital role the developers play
in value creation and growth in the area of the intelligent cloud and
intelligent edge,” Nadella said.