Microsoft Q1 FY 2020 earnings outperform, revenue growth in cloud and business processes slow slightly

Microsoft reported revenue of $33.1 billiion in FY20 Q1, delivering $1.38 earnings per share, and beating the consensus revenue estimate of $32.24B.

Revenue increased 14% and operating income rose 27% as Azure revenue growth continued at 59%. Dynamics 365 revenue growth of 41% outpaced the overall Dynamics product and cloud services revenue growth rate of 14%. Other commercial highlights included:

• Office 365 Commercial revenue growth of 25%
• LinkedIn revenue increased 25%
• Windows Commercial products and cloud services revenue increased 26%
• Unchanged Xbox revenue

Within the Productivity and Business Processes segment, which includes Dynamics, LinkedIn, and Office products, gross margin dollars grew 16 percent and were driven by "improvements in LinkedIn and Office 365," according to earnings presentation slides. Operating income overall in the segment grew by 23%, offsetting increased expenses related to investments in LinkedIn and cloud engineering.