Microsoft Earnings Release FY20 Q2
Microsoft Commercial Strength Powers Second Quarter Results
REDMOND, Wash. — January 29, 2020 — Microsoft Corp. today announced the following results for the quarter ended December 31, 2019, as compared to the corresponding period of last fiscal year:
· Revenue was $36.9 billion and increased 14%
· Operating income was $13.9 billion and increased 35%
· Net income was $11.6 billion and increased 38% GAAP and 36% non-GAAP
· Diluted earnings per share was $1.51 and increased 40% GAAP and 37% non-GAAP
“We are innovating across every layer of our differentiated technology stack and leading in key secular areas that are critical to our customers’ success,” said Satya Nadella, chief executive officer of Microsoft. “Along with our expanding opportunity, we are working to ensure the technology we build is inclusive, trusted and creates a more sustainable world, so every person and every organization can benefit.”
The following table reconciles our financial results reported in accordance with generally accepted accounting principles (GAAP) to non-GAAP financial results. Additional information regarding our non-GAAP definition is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.
[NOTE: The table will show up better at the link: microsoft.com ]
Three Months Ended December 31,
($ in millions, except per share amounts)
Revenue
Operating Income
Net Income
Diluted Earnings per Share
2018 As Reported (GAAP)
Net Impact of the Tax Cuts and Jobs Act (TCJA)
2018 As Adjusted (non-GAAP)
2019 As Reported (GAAP)
Percentage Change Y/Y (GAAP)
Percentage Change Y/Y (non-GAAP)
Percentage Change Y/Y (non-GAAP) Constant Currency
|
|
$32,471
| $10,258
| $8,420
| $1.08
| -
| -
| 157
| 0.02
| $32,471
| $10,258
| $8,577
| $1.10
| $36,906
| $13,891
| $11,649
| $1.51
| 14%
| 35%
| 38%
| 40%
| 14%
| 35%
| 36%
| 37%
| 15%
| 39%
| 39%
| 41%
|
GAAP results include a net income tax charge related to the TCJA of $157 million for the second quarter of fiscal year 2019. This net income tax charge is excluded from our non-GAAP results.
Microsoft returned $8.5 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2020.
"Strong execution from our sales teams and partners drove Commercial Cloud revenue to $12.5 billion, up 39% year over year," said Amy Hood, executive vice president and chief financial officer of Microsoft.
Revenue in Productivity and Business Processes was $11.8 billion and increased 17% (up 19% in constant currency), with the following business highlights:
· Office Commercial products and cloud services revenue increased 16% (up 18% in constant currency) driven by Office 365 Commercial revenue growth of 27% (up 30% in constant currency)
· Office Consumer products and cloud services revenue increased 19% (up 20% in constant currency) with continued growth in Office 365 Consumer subscribers to 37.2 million
· LinkedIn revenue increased 24% (up 26% in constant currency)
· Dynamics products and cloud services revenue increased 12% (up 15% in constant currency) driven by Dynamics 365 revenue growth of 42% (up 45% in constant currency)
Revenue in Intelligent Cloud was $11.9 billion and increased 27% (up 28% in constant currency), with the following business highlights:
· Server products and cloud services revenue increased 30% (up 32% in constant currency) driven by Azure revenue growth of 62% (up 64% in constant currency)
· Enterprise Services revenue increased 6% (up 7% in constant currency)
Revenue in More Personal Computing was $13.2 billion and increased 2% (up 3% in constant currency), with the following business highlights:
· Windows OEM revenue increased 18% (up 18% in constant currency)
· Windows Commercial products and cloud services revenue increased 25% (up 27% in constant currency)
· Surface revenue increased 6% (up 8% in constant currency)
· Search advertising revenue excluding traffic acquisition costs increased 6% (up 7% in constant currency)
· Xbox content and services revenue decreased 11% (down 9% in constant currency)
Business Outlook
Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.
Quarterly Highlights, Product Releases, and Enhancements
Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.
Here are the major product releases and other highlights for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.
Environmental, Social, and Governance (ESG)
To better execute on Microsoft’s mission, we focus our Environmental, Social, and Governance (ESG) efforts where we can have the most positive impact. To learn more about our latest initiatives and priorities, please visit our investor relations ESG website.
Webcast Details
Satya Nadella, chief executive officer, Amy Hood, executive vice president and chief financial officer, Frank Brod, chief accounting officer, Keith Dolliver, deputy general counsel, and Michael Spencer, general manager of investor relations, will host a conference call and webcast at 2:30 p.m. Pacific time (5:30 p.m. Eastern time) today to discuss details of the company’s performance for the quarter and certain forward-looking information. The session may be accessed at http://www.microsoft.com/en-us/investor. The webcast will be available for replay through the close of business on January 29, 2021.
Non-GAAP Definition
We recorded a net charge of $157 million during the three months ended December 31, 2018 related to the TCJA.
continues at microsoft.com
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