On this week’s earnings call, Microsoft CEO Satya Nadella revealed that the company achieved another quarter of sales growth for the three months ending 31 March 2019.
He said, “It was another strong quarter with double-digit top-line and bottom-line growth, the result of picking the right secular trends, accelerating innovation and most importantly, relentlessly focusing on our customers’ success.”
Nadella went on to talk about how revenues increased 14% year on year, to $30.6 billion. Three sectors contributed a third of this growth each: Productivity and Business Processes, Intelligent Cloud and More Personal Computing, he said.
Microsoft’s not-so-secret sauce this time around was its cybersecurity expertise, which Nadella said was “…a key factor in winning large clients”. By offering cutting-edge cloud protection, Microsoft was able to convince more customers to throw their lot in with them.
A clear leader
On the call, Nadella said “Cybersecurity is a central challenge, and Microsoft is the clear leader in cloud security with our unparalleled operational security posture, and our growing portfolio of security and compliance solutions spanning identity, device end-points, email, information, cloud applications as well as infrastructure.”
He specifically name-dropped several big names in the financial services sector who all adopted Microsoft 365 for its “…advanced security and compliance.” Names included BNP Paribas, National Bank of Canada, and Refinitiv.
Nadella went on to praise Microsoft’s performance in the infrastructure space. He said how Microsoft has done a much better job of “…winning large customers in the infrastructure space…” than it’s ever done before.
He also emphasised how modern-era Microsoft has broadened its appeal to a wider range of customers than in the past.
“We expanded Microsoft Threat Protection to include the Mac and manage vulnerabilities in third-party applications, providing the best defense for customers’ heterogeneous environments.
“And we introduced two first-of-their-kind services: Azure Sentinel analyzes security signals at massive scale across an entire organization, using AI to detect, investigate and respond rapidly to threats. Microsoft Threat Experts is a new cyberthreat hunting service that provides access to our security experts on demand.”
He ended off strong, saying “All this innovation is driving growth. Office 365 Commercial now has 180 million users. Our EMS installed base reached 100 million. And the Outlook apps on iOS and Android surpassed more than 100 million users for the first time this quarter.”
Trillion-dollar valuation achieved
Microsoft performed better than analysts expected this quarter, and has become the third company in history to enjoy a trillion-dollar valuation thanks to this sales growth.
The company’s share price opened at the $130 level on Thursday, April 25. This tipped its market cap over the $1 trillion mark.
Microsoft joins Apple and Amazon in this exclusive club. Apple reached the milestone first, in August 2018, followed by Amazon in September 2018.
Morgan Stanley’s prediction last year that Microsoft could be first to this valuation were, sadly, wrong.
[Source: Seeking Alpha transcript of earnings call]