Office commercial products and cloud services revenue grew 5%, heavily driven by the Office 365 side, while Office consumer products and cloud services grew 19%.
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Microsoft continues to see businesses moving to the cloud and subscription-based software and services, Chief Financial Officer Amy Hood said via telephone.
The cloud was one of the priorities for Chief Executive Satya Nadella, who took over in early 2014 and was anxious about the stagnation in Redmond’s Windows business.
Revenue from Azure, the company’s corporate cloud platform, doubled in the quarter ended June 30. There were consensus estimates from Thomson Reuters that called for $0.58 in EPS on $22.14 billion in revenue.
Productivity and Business Processes (this includes Office, consumer Office, and Dynamic, among other products): $7.0 billion, compared to $6.3 billion in revenue in the last quarter. The year-ago results included $8.4 billion in charges related to the company’s struggling mobile-phone operation. Microsoft reported earnings of 69 cents per share, easily beating Wall Street estimates of 58 cents. Office commercial products and cloud services revenue grew 5 percent with Office 365 revenue up 54 percent. The final piece of this segment is Dynamics, which saw a 6% (7% CC) gain in revenue compared to a year ago. Windows OEM Pro license revenue rose 2% after dropping 11% in the third quarter, Windows volume licensing revenue grew 3% and – with the help of weak year-ago numbers – Windows OEM non-Pro revenue jumped 27%.
Much of this year’s drop is the result of a fall in sales from Microsoft’s phone hardware unit, which the company has essentially shuttered less than three years after buying Nokia’s money-losing handset business. Microsoft stock barely moved in the wake of last week’s announcement that it would miss its goal of having Windows 10 on 1 billion devices in two years’ time.
Revenue was $20.6bn GAAP, with operating income at $3.1bn.
Microsoft Corp. still has a way to go in its shift to cloud services, but that’s nothing the technology giant or its bottom line can’t handle, analysts said Wednesday.
Analysts polled by S&P Global Market Intelligence project earnings of 53 cents a share on $13.56 billion in revenue.
Aside from cloud service, incomes from other Microsoft products like Surface and Xbox One have also risen. However, with Windows 10, Microsoft made a decision to offer it as a free upgrade.
Earlier this month, Microsoft it will take longer than initially expected for Windows 10 to reach a billion devices due to the lack of traction in its smartphone business.
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Like in previous quarters, analysts will be especially interested in Microsoft’s cloud revenue.
