Microsoft Corporation Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

  • Total revenue reached 33.1 billion dollars, up 14 percent year-over-year and 15 percent in constant currency. This continues Microsoft’s multi-quarter trend of double-digit growth and reflects broad strength across geographies and customer segments.
  • Commercial Cloud revenue grew 36 percent year-over-year to 11.6 billion dollars (39 percent in constant currency). Gross margin for Commercial Cloud improved to 66 percent, up 4 points year-over-year, driven by material Azure gross margin expansion.
  • Operating income increased 27 percent year-over-year, and earnings per share rose 21 percent to 1 dollar and 38 cents. Operating margin expansion was supported by both higher gross margins and disciplined expense management.

Business Segment Performance

Productivity and Business Processes
  • Revenue of 11.1 billion dollars, up 13 percent year-over-year (15 percent constant currency).
  • Office 365 Commercial revenue rose 25 percent (28 percent constant currency), driven by growing seat counts and higher average revenue per user. Seat growth of 21 percent reflects continued migration to Microsoft 365.
  • LinkedIn revenue increased 25 percent with sessions growing 22 percent; this follows multiple quarters of record engagement.

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Operator: Welcome to the Microsoft Fiscal Year 2020 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would like to turn the call over to Mike Spencer, General Manager of Investor Relations. Thank you. Please proceed. Mike Spencer: Good afternoon. Thank you for joining us today. On the call with me are Satya Nadella, Chief Executive Officer; Amy Hood, Chief Financial Officer; Frank Brod, Chief Accounting Officer; and Keith Dolliver, Deputy General Counsel. On the Microsoft Investor Relations website, you can find our earnings press release and financial summary slide deck, which is intended to supplement our prepared remarks during today’s call and provides a reconciliation of differences between GAAP and non-GAAP financial measures. All growth comparisons we make on the call today relate to the corresponding period of last year unless otherwise noted. We will also provide growth rates in constant currency, when available, as a framework for assessing how our underlying businesses performed, excluding the effect of foreign currency rate fluctuations. Where growth rates are the same in constant currency, we will refer to growth rate only. We will post our prepared remarks to our website immediately following the call until the complete transcript is available. Today’s call is being w

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