And more earnings folks. Its been a week, I must say. Those record-breaking numbers from Apple, that staggering growth from Facebook, the ‘as-expected’ shabby growth from Samsung, its now Microsoft. And mind you, the Redmond giant has crashed estimates, once again, riding on strong, sustained growth from its cloud department.
Microsoft today reported earnings for its second financial quarter of 2016. Now that might sound a bit off to most financial experts reading this piece, and that is because the Redmond giant’s financial year ends in June. The company reported non-GAAP revenue of $25.7 billion for the last quarter and $0.78 of adjusted per-share profit.
Wall Street had expected Microsoft to deliver an EPS of $0.71 on revenue of $25.26 billion. So yea, just like Facebook, Microsoft too beat those revenue estimates by almost half a billion !
Here’s a detailed chart for the second quarter :
And here are some key stats :
- Revenue was $23.8 billion GAAP, and $25.7 billion non-GAAP
- Operating income was $6.0 billion GAAP, and $7.9 billion non-GAAP
- Net income was $5.0 billion GAAP, and $6.3 billion non-GAAP
- Earnings per share was $0.62 GAAP, and $0.78 non-GAAP
Revenue in Productivity and Business Processes declined 2% (up 5% in constant currency) to $6.7 billion, with Office commercial products and cloud services revenue growing to 5% in constant currency, driven largely by Office 365 revenue growth of nearly 70% in constant currency.
Office 365’s already massive consumer subscribers increased to 20.6 million while Dynamics revenue grew 11% in constant currency with Dynamics CRM Online seat adds more than doubling year-over-year for the fifth consecutive quarter
Cloud Goes Strong
Microsoft reported a 5% (up 11% in constant currency) growth in revenue from Intelligent Cloud, taking it to $6.3 billion.
Server products and cloud services revenue grew 10% in constant currency. Azure revenue grew a whopping 140% in constant currency with revenue from Azure premium services growing nearly 3x year-over-year.
Microsoft also highlighted, that over one third of the Fortune 500 have chosen its Enterprise Mobility solutions, up nearly 3x year-over-year
Personal computing however, continued to be a downer for MS, just like it has been for other tech giants. Revenue in More Personal Computing declined 5% (down 2% in constant currency) to $12.7 billion, with the following business highlights:
- Windows OEM revenue declined 5% in constant currency, outperforming the PC market, driven by higher consumer premium and mid-range device mix
- Surface revenue increased 29% in constant currency driven by the launch of Surface Pro 4 and Surface Book
- Phone revenue declined 49% in constant currency reflecting our strategy change announced in July 2015
- Search advertising revenue excluding traffic acquisition costs grew 21% in constant currency with continued benefit from Windows 10 usage
- Xbox Live monthly active users grew 30% year-over-year to a record 48 million.