Update: Microsoft expects another big quarter (Q1 FY2021) for More Personal Computing (Windows, Xbox, Surface) with guidance revenue between $10.95 billion and $11.35 billion. More specifically, double-digit growth in Windows commercial; mid-teen growth, “solid demand” for Surface hardware; high teen growth for gaming.
Microsoft reported 2020 fiscal year quarter four (FY2020 Q4) results today with healthy revenue growth mostly driven by a surge in work-from-home scenarios and education-related needs.
Surface revenue is up 28 percent ($1.74 billion) compared to the same time last year ($1.35 billion), and up from the previous quarter’s $1.34 billion. The increase in sales is still just below Microsoft’s prior record of $1.92 billion due to the holiday shopping season.
Microsoft recently announced a refocus of its forthcoming Windows 10X operating system to go to single-screen devices first instead of planned dual-screen ones. The explanation given was the rapidly changing environment of Microsoft’s customers, and the company wanting to meet that demand. That decision becomes more clear once this quarter’s revenue is taken into consideration.
However, the surprising news relates to Windows non-Pro licenses, which saw a massive 34 percent jump driven by high consumer demand. Microsoft cites “remote work and learn scenarios” as the primary driving factors for the sharp rise in Windows sales to OEMs. For context, Microsoft projected low single-digit growth for Windows OEM revenue.
Overall, Microsoft beat Wall Street estimates with a total of $38 billion instead of the projected $36.54 billion by financial analysts. This beating of expectations is a continued and welcome trend with Microsoft, further driving up its surging stock price.
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