Microsoft (MSFT) is going through a major transformation over the past several years, particularly after Satya Nadella replaced Steve Ballmer as CEO in 2014. Nadella already was running Microsoft’s cloud division before being appointed as CEO, and focusing on the cloud was arguably his most important and effective contribution.
This transformation is producing solid results, and the company is reporting attractive financial performance on the back of impressive numbers from Azure, Office 365, and LinkedIn, in addition to more modest contributions from smaller segments such as Xbox and gaming, Surface, and Dynamics.
According to data from the most recent earnings report, Microsoft has more than 135 million users in Office 365 commercial. Outlook mobile is being used on more than 100 million iOS and Android devices, and more than 200,000 organizations are using Microsoft Teams as the hub for teamwork. Windows 10 is now active on nearly 700 million devices.
LinkedIn ended the most recent quarter with 575 million members and year-over-year revenue growth of 37%. Both engagement levels and job postings on LinkedIn reached new records last quarter, and mobile sessions grew 55% versus the same quarter in the prior year.
Microsoft closed a record number of multimillion-dollar commercial cloud agreements on Azure during the fiscal year 2018, more than doubling the number of $10 million-plus Azure agreements. Commercial bookings increased 18% year over year, with commercial unearned revenue reaching $29 billion and growing by 23%.
The gaming business surpassed $10 billion in annual revenue for the first time ever, and Microsoft is investing aggressively in content, community and cloud services across every endpoint of the gaming business to expand usage and deepen engagement.
Financial performance at the whole company level is clearly healthy. Microsoft produced $30.1 billion in sales last quarter, a vigorous increase of 17% year over year. Importantly, the company’s multiple business segments are performing strongly across the board, which is a major positive in terms of evaluating Microsoft’s ability to sustain performance going forward.
