As with previous quarters, these results reflect Microsoft’s strong growth in cloud businesses.
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“This past year was a pivotal one in both our transformation and in our partnership with customers who are also driving their own digital transformation”, chief executive officer Satya Nadella said during a conference call. Microsoft’s revenue of this Intelligent cloud business moved up by 7 percent to $6.7 billion.
Revenue from Microsoft Azure grew more than 100 percent year over year, as the company said usage of the platform had doubled.
Revenue for Azure – which customers can use to host their website, apps or data – grew 102 percent, but Microsoft did not say what the actual revenue figure was.
Revenue from the division that includes Microsoft’s Office productivity software was up 5 per cent. But sales from the “More Personal Computing” segment fell 4 per cent. The latter includes licensing fees that PC makers pay for Windows software, which saw an uncharacteristic increase, offset by declining revenue from smartphones and Xbox consoles. These hybrids saw revenue increase 9% year-on-year, mainly driven by sales of the new pieces of hardware (Surface Book and Surface Pro 4) which made up for the fizzling Surface 3.
Microsoft has beat analyst expectations with today’s FY 2016 Q4 earning announcement, where Microsoft reported a revenue of $22.6 billion non-GAAP, with a net income of $5.5 billion non-GAAP for Q4 2016.
But a 19 per cent rise in the company’s Office products and cloud services for consumers – which includes familiar software such as Microsoft Word – enabled it to report better-than-expected results.
In the same quarter one year ago, revenue for Microsoft reached $22.2 billion.
The profit in the tech giant’s fourth fiscal quarter was almost identical to the loss from a year earlier, when it took charges of more than $7 billion to reflect the lower value of the Nokia mobile phone division it had acquired. Right now, Microsoft is walking a tightrope – even with the slow growth of the cloud, people are buying less traditional software like Office and Windows Server. Windows Phone revenue plummeted 71 percent and last week, Microsoft admitted that it won’t hit its self-imposed deadline of getting Windows 10 onto a billion devices by 2018.
Microsoft’s profit was boosted this quarter by a more favorable tax rate.
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The company is also set to complete its $26.2 billion acquisition of LinkedIn which was announced mid last month. However, company officials have admitted it will take longer than three years to reach this milestone, ZDNet reported.
