Revenues at Microsoft fell by one-tenth in the last quarter of 2015, while profits fell by 15 per cent, both largely as a result of falling PC sales.
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Revenue was $25.69 billion, topping estimates of $25.26 billion. Azure was especially strong during the quarter, with revenue growing 140 percent in constant currency compared to last year’s quarter.
Shares rose 6.2% to $55.30 a share in after-hours trading.
Microsoft’s devices business saw mixed results as Surface revenue increased 29 percent in constant currency, while phone revenue fell by almost half.
Free cash flow for the quarter rose 25% to $3.6bn and the annualised run rate of commercial cloud revenues rose 70% year on year to $9.4bn.
The company’s net income fell to $5.00 billion, or 62 cents per share, in its second-quarter ended December 31 from $5.86 billion, or 71 cents per share, a year earlier.
This quarter also brought major changes to Dynamics, where revenue grew 11% year over year when measured in constant currency.
“It shows that momentum is building for Microsoft in 2016 rather than slowing, and that’s different from what we’re hearing from other enterprise tech companies”, said FBR Capital Markets analyst Daniel Ives.
“Businesses are also piloting Windows 10, which will drive deployments beyond 200m active devices”. The company now claims 20.6 million subscribers to its Office 365 Consumer subscription base.
Mr Nadella said companies were using its cloud services to drive transformation. Operating profit came in at 7.07 billion.
The release of two flagship Lumia 950 handsets appears to have done little to reverse the fortunes of Windows Phone, Digital Spy reports.
Bing search revenue grew 21 percent (but was down sequentially), boosted by Windows 10 adoption according to the company.
Sales of productivity and business “processes” products were down 2%, but would have been up 5% if not for the dollar, at $6.7 billion.
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Operations Chief Kevin Turner said Microsoft experienced a “strong holiday season”, citing growth at Xbox and Surface, which recently launched the Surface Pro 4 and Surface Book.
