Net income was $6.3 billion.
Advertisement
Software major Microsoft today said its revenue fell 10 percent to $23,796 million in its second quarter ended 31 December 2015.
The numbers beat expectations.
Microsoft broke with tradition last July by releasing Windows 10 as a free upgrade for older PCs, with no charge for future updates. The weak PC market led to a 5 percent fall in Windows OEM revenue at constant exchange rates, and revenue from mobile phones fell 49 percent. On the negative side, Microsoft is suffering due to floundering personal computer business, which is hurting profits from longtime Microsoft software businesses, especially Windows, while on the positive side, the flourishing cloud business gives hopes to the investors that the company will retain its relevance at least for some years to come. Unlike previous versions of the operating system, Windows 10 is created to work on ultrabooks, tablets and hybrid devices, decoupling it from the PC market. Revenue for the Intelligent Cloud division grew 5% to hit $6.3 billion, compared with $5.9 billion in the same quarter a year ago.
Now the second largest cloud provider, Microsoft stands far ahead of rivals Salesforce, Oracle and Google, according to analysts at Goldman Sachs.
Productivity and Business Processes would have produced revenue growth if currency exchange values had been constant.
Intelligent Cloud revenue climbed 5% or 11% in constant currency with a 140% increase in Azure revenue in constant currency. Search revenue was up 21 percent, while Xbox Live subscriptions rose by 30 percent.
“Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices”, the Indian-born top executive added.
“It was a strong holiday season for Microsoft, highlighted by Surface and Xbox”, said Kevin Turner, COO at Microsoft.
Microsoft made “significant progress” in boosting its gross margins for Azure and Office 365, and its addition of premium-level offerings in Azure and Office 365 have helped on that front, CFO Amy Hood said on the call.
Microsoft Office 365 consumer subscribers increased to 20.6 million.
Advertisement
In the company’s latest earnings results, which cover the last three months of the year, Microsoft reported a revenue rise of 2.7 billion USA dollars (£1.8bn) on the same period in 2014.
