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Microsoft FY19 Q4 earnings: Cloud and Surface focus pays off..

Microsoft under CEO Satya Nadella is charting a new course by finding new avenues of growth. Microsoft has reported strong FY19 Q4 results. The company is now valued at $1.05 trillion largely due to good performance in the intensely competitive Cloud business and Surface. 

Microsoft’s revenue has increased by 12% recording $33.7 billion and net income has rose to 21%, reaching $10.6 billion. Microsoft surpassed earnings estimates by 13%, delivering earnings per share (EPS) of $1.37. The company has reported a modest growth in personal computing space, recording revenue of $11.3 billion. 

Cloud computing 
Cloud has been the key driver for Microsoft. The commercial cloud revenue has increased by 39% year-on-year (YoY) basis, reporting $11.0 billion. This is the strongest commercial quarter for Microsoft’s cloud business. Regardless of increasing competition from Google Cloud, Amazon Web Services, Alibaba Cloud, Microsoft continues to grow. 

Teams and collaboration space 

Another highlight from Q4 results is the aggressive expansion in Teams collaboration space. Microsoft rival Slack is falling behind in competition. Teams has more than 13 million daily active users and 19 million weekly active users. Referring to future opportunities, Microsoft CEO Satya Nadella said, “Bringing Teams to new and underpenetrated markets including healthcare, hospitality and retail, as well as firstline workers is a key priority moving forward.” 

Commitment to innovate 

Reacting to the Q4 results, Microsoft CEO Satya Nadella said, “Every day we work alongside our customers to help them build their own digital capability – innovating with them, creating new businesses with them, and earning their trust. This commitment to our customers’ success is resulting in larger, multi-year commercial cloud agreements and growing momentum across every layer of our technology stack.” 

The share price rose by 2.6% in after-hours trade overnight. Microsoft’s year-to-date share price has increased by 34%.

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