Excluding currency effects, revenues would have risen 3 percent and adjusted earnings 23 percent.
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The Redmond, Washington-based tech giant reported net income in the fourth quarter of $5 billion, down 15% from the year-ago period. Most of this business segment’s success was down to Office 365 subscriber and revenue growth but Dynamics revenue also contributed. Smartphones and Windows OEM sales were key areas of decline. That distinction belongs to the Surface tablets and new laptop, as well as its cloud platform and Windows 10 software. The company has also pledged to use $6.5 billion for share buybacks to return value to its investors. Sales for server products and cloud services revenue grew 10% in constant currency, while Azure revenue grew 140% in constant currency with revenue from Azure premium services growing almost 3x year-over-year.
Microsoft exceeded Wall Street’s forecasts for its fiscal 2106 second quarter Thursday, with Azure, Office 365 and Surface products all continuing to see healthy sales growth. Earnings amounted to 78 cents a share, after adjusting for one-time costs. Skype for iOS and Android has more than 900 million downloads, he noted, and Office apps surpassed 340 million downloads in Q2.
On the Windows side, revenue for the More Personal Computing division was down five percent, or two percent in constant currency, according to Microsoft. This shift of critical workloads to Azure not only resonates with our long-term cloud migration thesis, but also signals strong customer preferences for Microsoft’s offerings overall.
The company units that sell computer processing power and software over the Internet continued to surge. Though that’s down from $26.1 billion in the same quarter a year prior, Microsoft increased its quarterly profits by 8 percent to $6.3 billion, up from $5.8 billion. Search advertising revenue was up by 21 per cent in constant currency.
The second quarter figures reveal how a significant proportion of the company’s revenues now come from cloud, with commercial cloud revenues exceeding $9.4bn.
Over one third of the Fortune 500 have chosen our Enterprise Mobility solutions, up almost 3x.
“The enterprise cloud opportunity is massive, larger than any market we have ever participated in”, Mr Nadella said in a conference call.
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Revenue in the business that includes Windows fell 5% to $12.66bn.
