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Microsoft Q2 2019 financial results: Strong revenue from a surface like Windows dropped



Microsoft has released the second quarter of financial results for 2019, announcing $ 32.5 billion in revenue and $ 8.4 billion net profit. The surface and games are up, but license revenue for Windows fell.

Although Surface revenue grew by just 1 percent last year in the same quarter last year, this year they jumped by 39 percent to $ 1.86 billion. The big jump is not surprising as Microsoft has released Surface Pro 6 and Surface Laptop 2 during the latest quarter, along with the new Surface Studio 2 and Surface Headphones. It was a tough vacation for Surface, and revenue reflected it.

Surface Book 2 and Surface Go sales pushed Surface revenue to $ 1.1 billion in the previous quarter, so clear demand continued through these new Surface devices. This means that Surface is now almost $ 2 billion worth of work for Microsoft.


Microsoft's gambling business is a recent peak in the company's earnings, and fiscal Q2 2019 does not differ. Game revenue grew 8 percent this quarter, although Xbox hardware revenue fell by 19 percent mainly due to Xbox One X launch in the same quarter last year. Active users of Xbox Live also hit 64 million on holidays, which is 8 percent more than in the previous year.

We are still waiting to hear more about Microsoft's xCloud streaming service, and the company will launch public trials this year. It's all part of Microsoft's plan to create its own Netflix for games, but in the future it will face the competition of Google, Nvidia, Sony, and even Amazon.


Playing in the cloud could become a key venue for Microsoft and other technology companies, and the software maker is already a step ahead of some competitors thanks to cloud domination. Microsoft's Azure revenue rose 76 percent this quarter. Server products and cloud services generally also increased by 28 percent. The entire intelligent cloud division has now risen by 24 percent to $ 8.6 billion in Microsoft's $ 29.1 billion total revenue this quarter.

On the Windows side, OEM Pro revenues fell by five percent this quarter, which Microsoft claims is roughly consistent with computer sales companies. Incomes not included in the project fell by 11 percent, and Microsoft blames this on "continuous pressure in the initial level category". In other words: Chromebook. Microsoft has just presented its latest challenge on the Chromebook to appeal to students and schools, trying to defend Google's hardware by 2019. It is clear that initial prices and devices are threatening Windows licensing revenue because consumers have many different device choices.

As always, the future growth of Microsoft is increasingly dependent on the success of the cloud. Azure revenue rose 76 percent compared to the previous year, while commercial products and services rose by 11 percent. Microsoft also now has 33.3 million subscribers to Office 365 spending, compared to 29.2 million last year. LinkedIn, Microsoft's $ 26 billion worth of betting, also records a solid 29 percent revenue growth.

Microsoft will now hold an investor call at 17:30 ET and will update this article with all the additional information.


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