Sales in the “More Personal Computing” group were down 5%, and would have been down 2% in constant-currency terms.
Advertisement
Microsoft generated $25.7 billion in revenue during the second quarter of the company’s 2016 fiscal year ending December 31, 2015, a 10 percent year-over-year decline.
Office 365 revenue grew 70 percent and the platform’s consumer subscribers increased to a total of 20.6 million.
Rumours suggest that the company is planning to retire its Lumia range in favour of a Surface-branded smartphone, which could launch later this year.
Revenue in the Microsoft PC division fell five percent to $12.7bn, with Windows OEM revenue falling five percent.
Microsoft continued to feel the impact of its changed phone strategy, with revenue from phone sales declining 53 percent year over year.
Nadella commented that “businesses everywhere are using the Microsoft Cloud as their digital platform”.
Microsoft was particularly pleased with its cloud performance, noting a 10 percent rise in revenue related to server products and cloud services, and a big 140 percent jump in Azure revenue.
As for the company’s aggressive promotion of Windows 10, those promotional nudges have drawn a few complaints from PC owners who don’t necessarily want to upgrade their software. Excluding certain items, the company reported income of $6.3 billion, or 78 cents per share, on adjusted revenue of $25.7 billion.
Microsoft reports in three segments, the largest being More Personal Computing, which is the division that produces the core Windows operating system and the Xbox video gaming system.
Microsoft’s stock rose more than 3 percent in extended trading after the results came out.
Although Microsoft said Xbox hardware revenue fell because of lower volumes of Xbox 360 sales, it wouldn’t get specific about the number of next-generation consoles it sold during the recent quarter.
Microsoft CEO Satya Nadella argued that the numbers of businesses that are piloting Windows 10 leads it to expect that it will be installed on over 200 million active devices in the coming year.
Advertisement
Microsoft reported a better-than-expected second quarter the company grew its cloud footprint and delivered solid gains in Office 365 subscriptions and Dynamics CRM Online seats.
