The robust result was driven by strong growth in Microsoft Cloud business.
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The CEO added that Microsoft Cloud has seen and continues to see significant customer momentum positioning Microsoft well to reach the new opportunities that lie ahead next year and beyond. In its Q3 report, Microsoft said revenue from its “Intelligent Cloud” business had grown to $6.1 billion, up 3 percent (or 8 percent in constant currency). This includes the cloud-based Office 365, which saw very small increases in subscription revenues, as well other Office software and Dynamics CRM.
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.
Microsoft reported revenue of $85,3-billion (GAAP) or $92-billion (non-GAAP) for the fiscal year ended 30 June 2016. Microsoft explains that this information is specifically provided for investors in order to better understand the performance of the company during the said period.
Microsoft Chief Financial Officer Amy Hood expected margins to decline slightly in the next year as well, she said in an interview.
That makes an annual “run rate” of $12.1 billion for cloud-related revenue, up sharply from over $8 billion a year ago.
“Only two companies are setting the tone of enterprise computing, Microsoft Azure and Amazon AWS”, said Global Equities Research’s managing director Trip Chowdhry, referring to Amazon.com Inc’s Web services unit.
During the quarter, Microsoft returned $6,4-billion to shareholders in the form of share repurchases and dividends.
The earnings for Microsoft had $22.6 billion of non-GAAP revenue and $20.6 billion of GAAP revenue with a per-share non-GAAP profit of 69 cents per share and 39 cents per share for GAAP.
Microsoft is still making lots of money, but its their cloud business that has done particularly well in the company’s fiscal fourth quarter of 2016.
That said, despite an increasing revenue, operating profit in its intelligent cloud businesses decreased 17 per cent to $2.19 billion in the quarter. Revenue from computer makers rose 11%.
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Microsoft admitted recently that its ambitious target to get Windows 10 running on one billion devices by 2018 is likely to be missed because of the failure of the smartphone business.
