Microsoft financial results: Overall revenue down, but cloud business growing

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Microsoft’s financial results for the second quarter of the 2015 fiscal year show revenue down 2 per cent year-on-year to $25.7 billion (non-GAAP). However, it beat analyst estimates of $25.26 billion, which helped shares in the Redmond company to rise 4 per cent following the announcement.

While overall revenue declined, Microsoft progressed in its cloud business – which many investors believe is key to its future success and includes Microsoft Azure and Office 365– with revenue in its Intelligent Cloud business growing 5 per cent year-on-year to $6.3 billion. Within that unit, cloud services revenue grew 10 per cent, while Azure revenue grew 140 per cent. According to Microsoft, one third of Fortune 500 companies now use its Enterprise Mobility services — a three-fold increase on the same quarter in 2014.

In the company’s Productivity and Business Processes group, revenue shrunk 2 per cent year-on-year to $6.7 billion, however Office 365 revenue grew nearly 70 per cent, and now counts 20.6 million subscribers.

“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas,” said Satya Nadella, Microsoft CEO. “Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices.”

Microsoft also generated $1.35 billion in revenue from Microsoft Surface tablets during the quarter, due to sales of the new Surface Pro 4 and Surface Book laptops. However, Windows revenue from PC manufacturers was down 5 per cent, while phone revenue shrunk 49 per cent, according to the company.

 

 

About Author

Gary Eastwood

Gary Eastwood has over 15 years of experience as a technology and business journalist and editor. He has held editorship positions on customer magazines for Microsoft, CSC, and EDF, as well as on B2B magazine Mobile Enterprise. He is the former Deputy Editor of Computer Business Review. In a freelance role, Gary has contributed numerous features and articles to a broad range of publications, including New Scientist, Computer Weekly, MIS, Marketing Week, Corporate Financier, Real Business, Wireless Business Review, and driven marketing communications projects for clients, such as Intel, the Confederation of British Industry, IBM, Logicalis, the Department of Trade & Innovation, and many others. Gary has written many white papers on a range of ITC subjects for Datamonitor. He is also an editorial photographer and business videographer, and has authored and ghost-written four books on photography. He is the Co-Director of EastwoodMiddleton Publishing, which provides contract/customer magazines for a growing list of clients, and publishes the B2B magazine for business leaders, Strategist.