Microsoft Corp reported quarterly revenue and profit that beat analysts’ expectations, driven by aggressive cost cutting and growing demand for its cloud products and services.
The cloud outshone all other areas of the business.
Wall Street analysts had been predicting that Microsoft would report earnings of around 71c per share; in the event, the company reported 78c.
All of its businesses combined, Microsoft collected $25.7 billion in revenue (non-GAAP) during the quarter.
Azure revenue skyrocketed 140% in constant currency, with revenue from Azure premium services tripling from one year prior. Meanwhile, Microsoft reported that its success in monetizing its search advertising had grown by 29%, which it attributed to the integration of search into Windows 10.
Windows OEM revenue declined 5 percent. Windows revenue closely tracks sales of personal computers, which fell 10.6% globally in the December quarter from a year earlier, according to research firm IDC.
“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas”, said Satya Nadella (pictured), Microsoft’s CEO, in a statement.
Intelligent Cloud encompasses server products and services such as Windows Server and Azure.
The Productivity and Business Processes division, which produces the Office suite of programmes delivered underlying growth of 5%, driven by 70% growth in revenues for the cloud-based Office 365 suite, where there are now 20.6m consumer subscribers in addition to the commercial client base. The phone revenue declined 49 percent during the quarter because of what Microsoft calls “our strategy change announced in July 2015”. Microsoft is also banking on enterprises to help improve Windows 10 adoption rates.
Microsoft confirmed that its devices revenue sank 22 per cent, which can largely be attributed to its troubled smartphones business. Microsoft says that both the Surface Pro 4 and the Surface Book helped achieve these figures, mostly because they both sold like hot cakes since their launch. And finally Xbox Live active users grew to 48 million, that’s 30 per cent up year-on-year.