Microsoft Declares Q4 Results for Financial Year 2020

Microsoft Q4 Results declared for Financial Year 2020: One of world’s biggest technological giant Microsoft Corp. declared its fourth-quarter result for the fiscal year 2020 that ended on June 30, 2020. The announcement is in line with the corresponding phase of the previous fiscal year. 

Here are the highlights for the quarterly result

  • The revenue remained $ 38 billion, which was 13% higher. 
  • The operating income also witnessed a significant growth of 8%, which was $ 13.4 billion. 
  • As per Generally accepted accounting principles, the net income saw a slump of 15% compared to the corresponding quarter of the last year and remained $11.2 billion. Interestingly, it was 5 per cent up as per non-GAAP standards.
  • The diluted income per share remained $1.46, that is a decrement of 15% GAAP, but saw a 7% growth as per non-GAAP. 

Commenting on the announcement, Satya Nadella, CEO Microsoft said that organizations that had the capacity of building digital capability would recover quickly and emerge swiftly from the ongoing crisis. He said that the past 5 five months were a lesson that taught tech intensity would be a key for business resilience. 

Here’s the overall Microsoft Q4 result for the fiscal year 2020.

  • The revenue shot up by 14 per cent and remained $143.0 billion for the year.
  • The operating income surged by 23%, i.e. $53 billion.
  • The net income increased by 20% non-GAAP and 13% GAAP, which amounts to $44.3 billion. 
  • The diluted earnings rose by 21% non-GAAP and 14% GAAP that is $5.76 per share. 

GAAP report for 2019 (amount in millions except per share earnings)

  • Revenue: $125,843
  • Operating income:  $42,959
  • Diluted earnings per share: $ 5.06
  • Net income: $ 39,240

After the adjustment of non-GAAP

  • Revenue and operating income remained the same. 
  • Net income: $36,830 
  • The diluted earnings per share remained $4.75. 

It is noticeable that the GAAP results incorporate $157 million as the net income tax charge, whereas $2.6 billion as the net income tax benefit for the period of 12 months that culminated on June 30, 2019. 

Meanwhile, Nadella emphasized that their company was the exclusive enterprise integrated with modern slack technology which was powered by AI and cloud. 

As per the report, the demand for several products increased as people continued working from home during the Covid-19 pandemic. The intelligent cloud segment, productivity and business process, and cloud usage, all witnessed a surge in the requirement.  

Subsequently, gaming, surface and Windows OEM got benefitted following the learning, work-play attitude of folks in the personal computing segment. On the contrary, due to the less expenditure in the advertising sector, the search was bullied by a negative impact.  

Here are some of the business highlights

  • Revenue for productivity and business processes:- $11.8 billion (an increase of 6% ).
  • Revenue of cloud services and commercial products:- 5% increase
  • Revenue growth of office 365 commercial:- 19% 
  • Revenue of office cloud services and consumer products: Up by 6%
  • The subscribers of office 365 consumers hiked to 42.7 million. 
  • Linked saw a sharp rise in its revenue by 10 per cent. 
  • Revenue of cloud services and dynamic products surged by 13 per cent. Dynamics 365 drove revenue growth (38 per cent). 
  • The revenue of intelligent cloud increased by 17 per cent, which is $ 13.4 billion. 
  • Revenue growth of Azure 47 per cent. It led to an increase in revenue of the cloud services and server products by 19 per cent. 
  • Revenue of enterprise services remained unchanged. 

More personal computing revenue rose by 14% ( $12.9 billion), which is a 16 per cent hike in constant currency. The operating cost also increased by 13 per cent ($12.3 billion). It also includes the costing led for the closing down of physical locations of Microsoft stores, which was $450 million. 

  • Revenue of Windows OEM: 7% increase
  • Revenue of Windows commercial products:– 9 % increase (cloud services)
  • Revenue of Xbox content along with services: up by a whopping 65 per cent. 
  • Increase in the surface revenue: 28% 
  • Revenue of search advertising decreased by 18% (excluding traffic acquisition charges).

Interestingly, Microsoft offered $8.9 billion as dividends and share repurchases to its shareholders during the fourth quarter of 2020 (fiscal year). It was an increase of 16 per cent compared to the same phase of 2019 (fiscal year). 

Adding more details to it, chief financial officer and executive vice president of Microsoft Amy Hood said that for the first time in the year the revenue of their commercial cloud went past $50 billion marks. 

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