Microsoft boasts of record financial year - again

Microsoft has announced its end-of-year results for its 2019 financial year, and boasts of a whopping 137 percent increase in net income year-on-year - despite a woeful result from its Xbox gaming arm.

In an earnings call late last night, Microsoft revealed just over $33.7 billion in revenue for the fourth quarter of its 2019 financial year, turning into $13.2 billion net income - a 12 percent and 49 percent increase respectively, year-on-year, thanks to a $2.6 billion net income tax benefit. For the full year, Microsoft recorded $125.84 billion in revenue and $36.83 billion in net income, a 14 percent increase in revenue over its 2018 financial year but a massive 137 percent increase in net income - assisted, again, by the $2.6 billion net income tax benefit and a mere $157 million income tax charge for the quarter, compared with a hefty $13.7 billion net income tax charge back in 2018.

It was a record fiscal year for Microsoft, a result of our deep partnerships with leading companies in every industry,' crowed Satya Nadella, Microsoft's chief executive, of the results. 'Every day we work alongside our customers to help them build their own digital capability - innovating with them, creating new businesses with them, and earning their trust. This commitment to our customers’ success is resulting in larger, multi-year commercial cloud agreements and growing momentum across every layer of our technology stack.'

For its fourth quarter, Microsoft saw considerable growth in its cloud computing division, Azure, which reported a 64 percent increase in revenue year-on-year. Other areas of growth included Office 365 Commercial at 31 percent, Dynamics 365 at 45 percent, server products and non-Azure cloud services at 22 percent, and LinkedIn at 25 percent. Even the company's Surface hardware division enjoyed growth, at 14 percent year-on-year.

The big standout, though, is the performance of Microsoft's gaming and Xbox software and services divisions: Gaming revenue dropped 10 percent year-on-year, while revenue from other Xbox services dropped three percent - the only recorded losses in Microsoft's quarterly report.

Investors, however, seem to believe that the gains elsewhere more than compensate for the losses in gaming: Microsoft's share price rose 3.52 percent in after-hours trading on the report, on top of a 0.11 percent gain in its closing price.