Microsoft’s Productivity segment is up by 13 percent


Matthew Adams
by Matthew Adams
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The Microsoft CEO, Mr. Nadella, has revealed the figures for the first quarter of the software giant’s fiscal year. Microsoft’s latest earnings call covered the period July 2019 to September 2019, which are the first three months of the big M’s FY20 (fiscal year 2020). The company’s latest financial statement shows encouraging growth for Microsoft’s Productivity and Business Processes segment.

The big M’s overall turnover and net profit figures for the first quarter of FY20 slightly exceeded expectations. Microsoft turned over 33.1 billion in Q1 FY20, which amounts to a 14 percent increase on the corresponding figure for Q1 FY19. The software giant recorded a $10.7 billion profit from July to September. Mr. Nadella stated:

We are off to a strong start in fiscal 2020, delivering $33 billion in revenue this quarter. Our Commercial Cloud business continues to grow at scale as we work alongside the world’s leading companies to help them build their own digital capability. Microsoft provides a differentiated technology stack spanning application infrastructure, data and AI, developer tools and services, security and compliance, business process productivity and collaboration.

The Q1 FY20 report includes figures for three primary market segments along with 14 product and service categories. There were percentage increases across the board for those categories that fall within the Productivity and Business Processes segment. The Productivity segment generated approx $11.1 billion for Microsoft, which amounts to a 13 percent increase on the corresponding period in 2018.

MS Office is a big part of the Productivity segment. The Office 365 commercial category had especially strong 25 percent revenue growth during Q1 FY20. That category is closely linked with Office commercial products and cloud services, which grew by 13 percent. In addition, Office 365 consumer products and cloud services grew by a smaller 5 percent with Office 365’s consumer subscription base reaching 35.6 million.

Microsoft acquired LinkedIn in 2016, which has its own category on the FY20 report. Thus, LinkedIn social media is also a big part of the Productivity segment. LinkedIn’s revenue rose by 25 percent during Q1 FY20.

The Dynamics line of software for enterprise users is another big part of the Productivity segment. Dynamics 365’s 41 percent growth is the second highest product category percentage increase during Microsoft’s Q1 FY20. That contributed to an overall 14 percent growth for the Dynamics products and cloud services category.

So, Office 365, Dynamics 365, LinkedIn, and Office 2019 have reaped a fruitful harvest for Microsoft during Q1 FY20. Overall, the Q1 FY20 financial report is a rosy one for Microsoft with only two of its product categories not generating revenue percentage increases for the period.

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