What you need to know
- Microsoft reported its Q1 2020 fiscal year results today.
- Surface revenue was down four percent compared to Q1 2019.
- Microsoft blames the dip on the product lifecycle transition period leading up to its latest Surface launch.
Microsoft's earnings report is out for the first quarter of its 2020 fiscal year, and the company raked in $33.1 billion in revenue overall, an increase of 14 percent. For its Surface business, however, things were down slightly when compared to the same period a year ago.
According to Microsoft's report, Surface revenues were down four percent for the quarter. The company cites the product lifecycle transition for the downturn.
Microsoft projected Surface revenues would be down year-over-year in its Q4 guidance, so this isn't an unexpected turn. Back in July, the compnay told investors "Surface revenue will decline slightly year over year driven by product lifecycle transitions" and that is exactly what happened.
This month, Microsoft released the Surface Pro 7 and Surface Laptop 3, replacing the last generation of Surface devices as they reached the end of their product refresh cycle. The Surface Pro X is expected to hit stores on November 5. With three devices launching between October and November, it's likely we'll see Surface revenues move up next quarter.
Microsoft will host a conference call at 5:30 pm ET, during which we should hear a further breakdown of the numbers, as well as guidance for Q2.
