Microsoft CEO Satya Nadella, who has overseen a trebling in share price since taking the helm in 2014, hailed an “incredible year” for the Redmond, Washington-headquartered company, as revenues soared to $110.4 billion in the past financial year.
Speaking on a conference call, the company’s CFO Amy Hood emphasised significant gains by Microsoft Azure and a doubling of $10 million+ Azure deals over the past financial year, in which Azure revenues rose 89 percent.
“Azure per user services performed ahead of expectations with our Enterprise Mobility installed base growing 55% year-over-year to over 82 million,” she said.
Asked by an analyst what kind of workloads were being migrated to Azure, Nadella responded: “There’s a bunch of workloads that are migrating to the cloud, people use both Azure Stack plus Azure. So, that continues to drive a lot of IaaS growth for us as people are sort of looking basically to lift and shift a lot of their current data center workloads.”
“Then, on top of it, we even have modernization of apps that is accelerating. And that drives a lot of the higher level services, in particular our data services as well as our AI services when AI services are essentially compute, but what happens is all this compute then requires storage and data, and that’s another place where we see increasing acceleration.”
Microsoft also saw resurgent performance by its gaming segment (up 39% to $2.3 billion), and drove a revenue increase at LinkedIn of 37 percent.
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“We had an incredible year, surpassing $100 billion in revenue as a result of our teams’ relentless focus on customer success,” said Satya Nadella. “Our early investments in the intelligent cloud and intelligent edge are paying off, and we will continue to expand our reach in large and growing markets with differentiated innovation.”
Microsoft returned $5.3 billion to shareholders in the form of dividends and share repurchases in the fourth quarter of fiscal year 2018, an increase of 16% compared to the fourth quarter of fiscal year 2017.
“Exceptional sales execution delivered double-digit revenue growth across all segments and strong progress against our strategic priorities, anchored by commercial cloud revenue growing 53% year-over-year to $6.9 billion,” said Amy Hood.
Microsoft CEO Highlights Structural Reorganisation as Behind Success
On a conference call, Nadella emphasised the results as being powered by a refocus of Microsoft’s engineering teams.
“I shared our vision for the intelligent cloud and intelligent edge a little over a year ago… We focused on the right secular technology trends and growing markets and followed that up with solid roadmap execution.”
“We reorganized our engineering teams to break free of the categories of the past and better align with the emerging tech stack from silicon to AI to experiences, to better serve the needs of our customers today and long into the future. We reoriented our sales and marketing teams, adding industry and technical expertise to partner more deeply with our customers on their digital transformation journeys. And, most importantly, we drove innovation to deliver differentiated value across the cloud and the edge,” he noted.
