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.
In the last quarter, Microsoft released multiple new devices, including Surface Go 2, Surface Book 3, Surface Earbuds, and Surface Headphones 2.
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.
Windows OEM revenue saw a dip in Pro licenses – down 4 percent – due to weakness in small business demand, likely driven by many companies still operating at reduced staff, or even closed.
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.
Microsoft will share guidance for next quarter on its earnings call at 5 PM ET today. We’ll update this story with that information as it is revealed.
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