More broadly, we continue to see momentum with organizations across Microsoft 365. The supply chain in China returned to more normal operations at a faster pace than we had anticipated.Â, And operating margins expanded this quarterÂ, Capital expenditures including finance leases were $3.9 billion, up 15 percent year-over-year to support growing demand for our cloud services, and lower than expected, driven by COVID-19 related delays across the supply chain. And, the number of organizations integrating their third-party and LOB apps with Teams has tripled in the past two months.In healthcare alone, there were more than 34 million Teams meetings in the past month. We saw a slowdown in our transactional business across segments, but particularly in small and medium businesses. In our consumer business, the landscape evolved quickly following our mid-quarter guidance update. We delivered double-digit topline andÂ bottom lineÂ growth once again this quarter, driven by the strength of our commercial cloud. The profit for the quarter ended March 31 increased to $10.8 billion ($1.40 per share). LinkedIn is where more than 690 million professionals go to connect, learn new skills, and find new opportunitiesÂ âÂ contributing to record levels of engagement across the platform in Q3.We are helping organizations attract, retain, and develop talent with our portfolio of Talent Solutions, Talent Insights, Glint, and LinkedIn Learning. Microsoft Corporation (NASDAQ: MSFT) announced its Q3 2020 earnings report earlier this week and the company revealed growth in sales and profits. New Azure Edge Zones extends Azure to the network edge, connecting directly with carrierâs 5G networks to enable immersive, real-time experiences that require ultra-low latency. With that, I'll transition to Amy to add further. Microsoft's Intelligent Cloud segment has grown in each of the past 13 consecutive quarters, with revenue more than doubling from $6.1 billion in Q1 FY 2017 to $12.3 billion in Q3 FY 2020. In healthcare, we are seeing compute, data, and AI come together to help speed up response â from testing to therapeutics and vaccine development. Now onto Dynamics 365Dynamic 365 is helping thousands of organizations accelerate digital transformation as they remote every part of the operation â from manufacturing, to supply chain management, to sales and customer service â inclusive of new scenarios like curbside pickup, contactless shopping and remote customer assistance and operations. And in Enterprise Services, we expect a low single digit revenue decline driven by continued delays in our consulting business. In fact, we have marketplaces on Azure, as well as on GitHub. Satya, a question for you: You did a really great job of talking to how well the expanded portfolio and really broad portfolio that Microsoft brings to the market has helped customers during a crisis period, and a period that engendered a lot of change within the way organizations were operating. We go over what you need to know about earnings from Microsoft, Pinterest, Snap, Twilio and Shopify many of which had big beats .. READ MORE Those are the types of solutions that are going to be very relevant in times like this. SATYA NADELLA: Let me start, and Amy, you can add to it. : Thanks, Raimo. X The Redmond, Wash.-based company earned $1.40 a share on sales of $35.02 billion in the quarter ended March 31. BRENT THILL, Jefferies: Good afternoon. GET NOTIFICATION. However, growth will be partially offset by continued transactional weakness, some impact from the previously mentioned sales dynamics, and a strong prior year comparable with four points of growth from a greater mix of contracts with higher in-period recognition. And our acquisition ofÂ. Office 365 commercial revenue grew 25 percent and 27 percent in constant currency, again driven by installed base growth across all workloads and customer segments as well as higher ARPU, with strong upsell to E5. Very impressive quarter in a difficult time, and I hope all of you and your families are all safe and healthy. We'll take the next question, please. How do you think that that balances out for bookings and for consumption? Microsoft. And specifically, the full stack we have from infrastructure to our SaaS applications are going to be very competitive in that context. Worldwide, Microsoft employees […] And I think in some ways that will the same thing that we were already seeing as a transition in terms of thinking about that for long term. The remaining 20 percent of revenue, primarily from annuity agreements, transactional licensing, and LinkedIn, is subject to more volatility in the current environment. Company gross margin percentage was 69 percent, up 2 points year-over-year, driven by favorable segment sales mix and improvement across all three of our segments. Anybody who has a digital twinÂ is able toÂ first remote the control plane, is able to automate, is able to simulate. Microsoft Defender ATP now supports Linux, in addition to Windows and MacOS, with iOS and Android to come soon. In Surface, the continued strong demand should drive revenue growth in theÂ low-teens. I mean, this thing that I always say, which is when our customers do well, we'll do well on a long-term basis, that's at the core of our business model. Operating income grew 42 percent and 46 percent in constant currency. I'm interested in whether you see the current environment as a net tailwind or a net headwind on Azure growth, just as we try to weigh the idea of the pandemic as a forcing function to adopt cloud a little more rapidly versus, on the other hand, potential economic pressure on IT budgets. So, that's, for example, something, the utility of it will only increase for our customers as some people come back to work, some people are remote. Microsoft reported its Q3 2020 earnings on Wednesday, with its all-important cloud division jumping 27% year-over-year.These are the most important numbers from the … Teams of people and organizations can get more done. AndÂ ImmunityBioÂ is using more than 24 petaflops of computing power on our cloud to help researchers build models in days, instead of months. Can you talk to us a little bit about how much of that sort of assistance and how much of that you were able to actually take to revenues, if you will?Â Â How much of that is stuff that you couldÂ. Segment gross margin dollars increased 6 percent and 8 percent in constant currency and gross margin percentage increased 2 points year-over-year due to higher margin sales mix. Thanks for getting our firm up on Teams, basically, in a couple weeks. Firstly, Satya, how do you think about how much of that DevOps lifecycle Microsoft needs to address directly versus partner with third parties, or maybe opensource. But at the same time, if there is going to be economic activity, then I would claim that digital as a component of that economic activity is going to increase. Big Tech Q3 2020 Earnings Analysis: Drivers & Forecasts (Microsoft, Apple, Amazon, Facebook & Google) - ResearchAndMarkets.com November 05, 2020 12:24 PM Eastern Standard Time If you can create an Excel spreadsheet, you can create an app, build a virtual agent, automate a workflow, analyzeÂ dataÂ and share insights in real-time.In just two weeks, Swedish Health Services, the largest non-profit health provider in the Seattle area, used Power Apps to track critical supplies. The worldâs largest hedge fund, Bridgewater Associates, is using security services built into Microsoft 365 to protect employees and core services in a Zero Trust environment. Patagonia is using Dynamics 365 Commerce to rapidly move to new, more intelligent distribution and fulfillment models, including contactless shopping. Cash paid forÂ P,P, and E was $3.8 billion. VIEW DETAILS. OPERATOR:Â Thank you. We do not undertake any duty to update any forward-looking statement. It is the only way for you to have even the business continuity required in times like this, and your needs going forward of increasing digitization are going to be met with better pricing, better economics, at a unit price level for the given business. In line with expectations, revenue from Productivity and Business Processes was $11.7 billion, increasing 15 percent and 16 percent in constant currency. Revenue was $12.3 billion, increasing 27 percent and 29 percent in constant currency, ahead of expectations, driven by continued customer demand for our hybrid offerings. Therefore, in Q3, revenue was $35 billion, up 15 percent and 16 percent in constant currency. A couple of weeks into the Q3 2020 earnings season, companies are proving more resilient than expected, according to research firm FactSet, which revised its earnings … Things will start coming back in terms of economic activity and we'll have to keep adjusting the dial. Other income and expense should be negative $100 million as interest expense is expected to more than offset interest income. Â Thanks, Mark. We care about this. That's what we will increasingly do, but that almost means we want to be competitive in each layer and open in each layer. Our outlook assumes this benefit remains through much of Q4, though growth rates may be impacted as stay-at-home guidelines ease. Our commercial revenue annuityÂ mixÂ increased 2 points year-over-year to 92 percent. Office 365 consumer subscribers grew to 39.6 million, benefiting from the increased demand noted earlier. Operator, we'll move to the next question, please. This hybrid work is going to be there with us forÂ a period of time. To your point, ultimately, Microsoft is not immune from what's happening broadly in the world, in terms of GDP growth. And so, I would keep that in mind, but other than that, I think obviously over a longerÂ period of time, it's certainly a tailwind. In our consumer business, we expect continued demand across Windows OEM, Surface, and Gaming from the shift to remote work, play, and learn from home. Microsoft Corp (NASDAQ:MSFT) Q3 2020 Earnings Conference Call April 29, 2020 5:30 PM ET. Now more than ever, organizations are relying on Azure to stay up and running, driving increased usage. It is the only solution with meetings, calls, chat, collaboration with the power of Office, and business process workflows â in a single, integrated user experience â with the highest security as well as compliance. Â And the one scenario I should mention is, for anyone you know who's looking to say how do I continue to generate revenue, remote sales, for example, is going to be a very critical scenario, and there's no better solution than the combination of Dynamic sales and LinkedIn sales navigator to be able to drive especially B2B sales. Microsoft’s commitment to sustainability. And I think that's probably not surprising. Growth was driven by strong renewal execution consistent with prior quarters, though we saw some impact from the previously mentioned changes in sales dynamics. Satya, given the incredible spike you're seeing in Teams and broader Office adoption around remote work, I guess maybe first, given how this crisis has dramatically accelerated some of these adoption curves, how do you think about the longer-term growth and monetization trajectory on Teams and Office maybe versus pre-COVID levels?Â. Now to segment guidance, which includes wider ranges than normal given the uncertainty in our businesses with higher in quarter sales and revenue recognition. Read the full Microsoft’s Q3 2020 earnings call transcript. Interview with Microsoft Board Member Hugh Johnston WATCH THE VIDEO. Overall, for the way we've always approached Teams is as a user experience and I would say a scaffolding was to sort of incorporate what's the modern way of working. The one difference I will say is just because there was so much deployment done in the past four weeks, especially around Teams and some of the other workloads, there's certainly a distinction that a lot of that was expanding the footprint, as opposed to a deployment much faster than I think many enterprises had initially planned to do so. If you ask a question, it will be included in our live transmission, in the transcript, and in any future use of the recording. 2020 Annual Report. Transcript This was the largest beat by dollar in Twilio’s history, as referenced by analyst Khozema on the earnings call. SATYA NADELLA:Â Thank you all. Wednesday, April 29, 2020. Revenue was $11 billion, increasing 3 percent and 4 percent in constant currency, ahead of the revised expectations from our mid-quarter guidance update, as better than expected Windows OEM, Surface, and Gaming revenue more than offset lower than expected Search revenue. Then, I believe as we work out here, so if you think about the next phase of recovery, it's more like a dial. As of today, we have 50 million developers on GitHub. : Yeah, maybe, Amy, I'll take the second one first, and then you can take the first one. The FX impact on COGS growth was slightly more favorable than expected and reduced growth by 1 point. Â Thank you. OPERATOR: Thanks. And operating income increased 20 percent and 23 percent in constant currency. Operator, we'll take the next question now, please. Thinking that through holistically is the most important thing, and that's where our focus will be. In closing, we will continue to work and innovate alongside our customers as their digital first responders today,Â and as their trusted digital transformation partners going forward. Twilio pre-announced Q3 revenue would come in ahead of previously-issued guidance from the company of $401 million to $406 million, with analyst consensus at $404M. The way you would have seen a little bit of weakness, I guess, in on-premises Office Commercial due to transactional weakness and maybe SMB. Microsoft Fiscal Year 2020 Third Quarter Earnings Conference Call. Most Popular. Operator, we'll move to the next question please. : I apologize. Teams keeps all your work and communication â conversations, documents, whiteboards, and meeting notes â in context. Professionals watched nearly 4 million hours of content on LinkedIn Learning in March, a nearly fifty percent increase month-over-month. On the Q1 2021 earnings call, Nadella shared that Microsoft now had … 2020 Corporate Social Responsibility (CSR) Report. Approximately 50 percent will be recognized in revenue in the next 12 months, in line with prior quarter trends. As a result, operating income grew 15 percent and 17 percent in constant currency. If you think about it, the orders of magnitude increase we have seen in usage in our own case with our applications, such as Teams or our virtual desktop have been tremendous. All growth comparisons we make on the call today relate to the corresponding period of last year unless otherwise noted. Satya, given the incredible spike you're seeing in Teams and broader Office adoption around remote work, I guess maybe first, given how this crisis has dramatically accelerated some of these adoption curves, how do you think about the longer-term growth and monetization trajectory on Teams and Office maybe versus pre-COVID levels?Â, And to your second part, we've always said this, which is we don't, for example, even allocate our capital in building out our cloud infrastructure for Azure or Dynamics 365, or Microsoft 365, or even for that matterÂ. Now letâs move to our outlook, starting with our expectations of COVID-19 related impact. And we are working with card issuers like American Express so merchants who use Dynamics 365 Fraud Protection can reduce fraudulent activity as they process more transactions online. And to your point about whether -- and usage leads to monetization. MICHAEL SPENCER:Â Thanks, Mark. Our next question comes from the line of Mark Murphy with JP Morgan. Microsoft company logo. Overall, first, I think I would say the current cloud architecture, whether it's at the infrastructure level or the SaaS applications with M365 or Azure, have been I think very, very helpful in us being able to all, as an economy, pivot to this new way of working, working from home, remoting all of our operations. We assume advertising spend levels from March do not improve in Q4, which will impact Search and LinkedIn. : Thanks, Brent. Operator, we'll move to the next question please. Streams are up 158 percent since February. But at the same time, I think business applications that perhaps have longer lead in terms of implementation, people are probably going to take some more time to decide on it, whereas we think we're well-positioned to capture the new scenarios. In fact, we have marketplaces on Azure, as well as on GitHub. How do you think that that balances out for bookings and for consumption? : Yes, thank you. Now, onto Gaming.People everywhere are turning to gaming to sustain human connection while practicing social distancing. Microsoft Defender ATP now supports Linux, in addition to Windows and MacOS, with iOS and Android to come soon. We sawÂ all-time recordÂ engagement this quarter, with nearly 90 million active users of Xbox Live, led by strength on and off console. It helps people collaborate inside and outside meetings, making them more efficient and effective while reducing fatigue. But it's not to say that anyone else can't participate. Commercial remaining performance obligation increased 24 percent to $89 billion. Third party analysts affirm our leadership as the only company that offers comprehensive identity, security, and compliance solutions. ... Microsoft Fiscal Year 2020 Third Quarter Earnings Conference Call. Security remains a strategic priority for every organization, and the shift to remote only increases the need for integrated, end-to-end Zero Trust security architecture that reduces both cost and complexity. Operator, we'll move to the next question, please. And that breadth in a moment, in a period like this, all the pieces are important to value, long-term here, to a company being able to transition through the phases that Satya talked about, from this initial phase of almost emergency response to a hybrid phase to ultimately what I think we all believe is a very different way and a long-term way of working, and collaborating together, and driving a digital economy. And so, this very holistic and breadth commercial opportunity, but also that extends in many ways to consumer opportunities for us, as well, is connected. Usage of Windows Virtual Desktop tripled this quarter as organizations deploy virtual desktops and apps on Azure to enable secure remote work.From Interpublic Group and Kohler to Vodafone, the worldâs leading companies are choosing Microsoft 365 as their productivity cloud. : Hey, guys. And new Insider Risk Management in Microsoft 365 helps organizations detect and mitigate malicious activity. : Thanks, Keith. One of the things is data sovereignty and security is not going to go away ever, especially in the geopolitical environment we live in. Â And maybe just to add on to that, the way you might think about that, Keith, is the first stage for many of the licensing protocols was to include trial offers for many of our customers who were in need of the specific things we just discussed, and over time, being able to convert that into a monetization engine, or for example, to take some of the usage surge we've seen even across our consumer properties, or even in gaming or Office 365, which is now Microsoft 365 for consumers.