“As these organizations turn to us, we’re seeing momentum across Microsoft’s cloud services and with Windows 10”, said Nadella in a statement.
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Both revenue and net income were down from the previous year’s levels.
Adjusted revenue of $22.08 billion was just shy of the $22.09 billion analysts had expected, according to Thomson Reuters I/B/E/S.
According to Hood, the higher tax rate reflected an unexpected shift in Microsoft sales to countries with higher tax rates, along with a shift to revenue from cloud computing, which is taxed at a higher rate than traditional software licenses. “The intelligent cloud” chiefly comprises Microsoft’s products and services under the Cloud & Enterprise domain, including Windows Server, SQL Server, System Center, Azure, and Enterprise Services.
Shares of Microsoft fell in after-hours trading, changing hands recently at $53.05, down $2.73, or almost 5 percent.
The revenue of Productivity and Business Processes segment clocked in at $6.5 billion, up 1% YoY. More Personal Computing business is expected to generate revenue of $8.7 to $9 billion.
“Organisations using digital technology to transform and drive new growth increasingly choose Microsoft as a partner”, said Satya Nadella, Microsoft CEO.
Microsoft posted its third-quarter earnings report yesterday, revealing that the company’s cloud division is its best-performing business. On the other hand, consumer Windows OEM revenue climbed 15 percent.
A particular bright spot was Surface revenue, which grew 61pc during the quarter. The quarter was marked by an unusually strong performance from Office consumer products and cloud services; after many quarters of large year-on-year declines (sometimes as much as 30 percent), in the most recent quarter Office consumer revenue was up by 3 percent (6 percent constant currency).
While the company’s cloud services and Office 365 revenues grew at a decent rate, the revenue from Intelligent Cloud, which houses the Azure cloud, only grew revenue by 3%, up 8% in constant currency, to $6.1bn.
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Mobile division revenue declined a whopping 46%, as the company managed to sell only 2.3 million Lumia smartphones. Microsoft attributed this growth to Surface Pro 4 and Surface Book sales, but of course it neglected to provide firm numbers for how many tablets and computers it sold in the last three months.
