The figures set a new record fiscal year for Microsoft as it spends its days valued as a $1 trillion company. Microsoft first passed the $1 trillion milestone in this quarter, thanks to its continued growth in cloud and diverse businesses.
Surface revenue was up in the same quarter last year, and it’s up once again by 14 percent. Microsoft attributes this to “strong growth in our commercial segment.” This growth shows that Surface hardware is selling well, despite no new refreshed models during this quarter. Microsoft also released the Surface Go last year, and it helped boost revenue, and there’s no refreshed model in 2019 to help push revenues.
Microsoft refreshed the Surface Pro, Surface Laptop, and Surface Studio back in October and a new Surface Pro and Surface Book models are expected in October. However Microsoft CFO Amy Hood revealed the company is expecting Surface revenue to decline next quarter, likely because of a lack of new hardware.
Gaming revenue declined by 10 percent this quarter, alongside Xbox software and services revenue decline of three per cent.
Vole's Xbox hardware revenue declined a massive 48 per cent, and Microsoft attributes this to a “decrease in the volume of consoles sold.” Microsoft is hoping the Xbox One S All-digital Edition will help.
Xbox Live active users did grow to 65 million in the quarter though, thanks to the wide range of users across Xbox One consoles, Windows 10 PCs, and mobile devices like iOS and Android. Microsoft is now getting ready for its xCloud game streaming service to enter public preview in October.
OEM Pro revenue grew by 18 per cent, thanks to demand for Windows 10 and businesses upgrading their machines from Windows 7. Non-Pro revenue declined eight per cent, which was actually below the overall consumer market, once again because of “continued pressure in the entry-level category.”
As always, it’s Microsoft’s cloud services were the belle of the ball. Office commercial products and cloud services revenue increased 14 percent year-over-year, and Microsoft has more than 180 million active monthly Office 365 business users. There are 34.8 million people subscribed to Microsoft’s Office 365 service for consumers.
Server and cloud services revenue grew by 22 per cent, boosted once again by Azure revenue growth of 64 per cent. This is the lowest growth rate for Azure in recent years, showing that the company still has room to catch Amazon and keep Google at bay.