Microsoft Corporation (NASDAQ:MSFT) stock rose 4.22% after hours yesterday, as it posted earnings beats in its Q2 results.
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Revenue of $25.7 billion (Non-GAAP), is down 2% year-on-year, but ahead of the $25.26 billion expected by Wall Street.
Microsoft also returned $6.5 billion to shareholders in the form of share repurchases and dividends.
This segment, which includes results from server products and services (including Windows Server and Azure), grew 5 percent to $6.3 billion.
Windows phones have not been selling well and Microsoft is now seeing a decline in both its smartphone business – which had sales of 4.5 million – and its “dumb” phone business. Phone revenue shrunk 49% in constant currency.
Excluding one-time items, the company profit rose to $6.275 billion, or $0.78 per share, up from $5.790 billion, or $0.70 per share a year ago.
This division covers Microsoft’s Office productivity tools, including Office 365 and the Dynamics business software lines, where Office consumer revenue declined by 14 percent, or eight percent in constant currency. But the big highlight was Azure revenue, which grew 140 percent, including revenue from Azure premium services growing almost 3x year-over-year.
On the Windows side, revenue for the More Personal Computing division was down five percent, or two percent in constant currency, according to Microsoft.
Microsoft’s CEO Satya Nadella says that the company expects a strong next quarter, specifically thanks to Windows 10, as businesses are now looking into the operating system and piloting it for further deployment.
“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.
Nadella also shared that Windows 10 was now powering more than 200 million devices, a number that Microsoft hopes will hit $1 billion in the next few years.
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Microsoft Surface revenue was up 29% year on year, totalling $1.35 billion (about £94m, AU$1.91bn). Our commercial business executed well as our sales teams and partners helped customers realize the value of Microsoft’s cloud technologies across Azure, Office 365 and CRM Online.
