Microsoft Corporation Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Total revenue reached $37.2 billion, up 12% year-over-year (YoY), driven largely by cloud, productivity, and PC-related demand.
  • Operating income increased 25% YoY and earnings per share rose 32% YoY to $1.82.
  • Commercial Cloud revenue surpassed $15.2 billion, up 31% YoY, with commercial cloud gross margin expanding by 5 points (largely due to changes in accounting estimates).
  • Microsoft continued to benefit from accelerated digital transformation across industries, driven by remote work, learning, and commerce trends.

Performance by Segment

Productivity & Business Processes

  • Revenue: $12.3 billion, up 11% YoY.
  • Office 365 Commercial revenue grew 21% YoY (20% in constant currency), with paid seats increasing 15% YoY.
  • Microsoft 365 Consumer subscriptions rose 27% YoY to 45.3 million.
  • Dynamics revenue increased 19% YoY; Dynamics 365 grew 38% YoY.
  • LinkedIn revenue grew 16% YoY, benefitting from recovery in advertising and record engagement.

Intelligent Cloud

  • Revenue: $13 billion, up 20% YoY.
  • Azure revenue grew 48% YoY (47% CC), driven by strong consumption growth.
  • Enterprise Mobility installed base grew 27% YoY to 152 million seats.

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Operator: Greetings, and welcome to the Microsoft Fiscal Year 2021 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Spencer, General Manager, Investor Relations. Thank you. You may begin. Michael Spencer: Good afternoon and thank you for joining us today. On the call with me are Satya Nadella, Chief Executive Officer; Amy Hood, Chief Financial Officer; Alice Jolla, 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. Unless otherwise specified, we will refer to non-GAAP metrics on the call. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the Company’s quarterly performance in addition to the impact these items and events have on the financial results. All growth comparisons we make on the call today relate to the corresponding per

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