Microsoft Q1 FY20 Earnings: Azure revenue growth falls to 59%

Microsoft today announced FY20 Q1 earnings results. The revenue was $33.1 billion and the operating income was $12.7 billion. Revenue in Intelligent Cloud was $10.8 billion and it increased 27%, with the following business highlights:

Microsoft reported that Server products and cloud services revenue increased 30% driven by Azure revenue growth of 59%. Enterprise services revenue increased 7%. For comparison, Microsoft reported server products and cloud services revenue growth of 22% and Azure revenue growth of 64% in the last quarter.

Enterprise Mobility continues to grow and its installed base increased to 120 million which is a 36% growth. Server products revenue including Windows and SQL server grew 12%, thanks to Windows Server 2008 and SQL Server 2008 end of support.

The gross margin dollars of this division grew 27%. The gross margin percentage increased because of material improvements in Azure gross margin offset by an increased mix of cloud offerings.