14 DAY TRIAL // Microsoft has unveiled its financial results for the third quarter of fiscal year 2016, reporting a net income of $3.8 billion (€3.3 billion) and revenues of $20.5 billion (€18.1 billion).
This is a decline from the same quarter of the previous year, when the company posted $5.0 billion (€4.4 billion) net income and revenues of $27.1 billion (€23.9 billion).
Microsoft’s products had mixed performance, and while some improved during the quarter, others fell significantly, dragging down the company’s revenues.
For example, the Productivity and Business Processes unit improved by 1 percent to $6.5 billion (€5.7 billion) while Windows OEM revenue dropped 2 percent. Furthermore, the Intelligent Cloud business increased 3 percent, but the phone division fell no less than 46 percent in constant currency.
Despite these results, Microsoft says that these are “strong results” and praises Windows 10, as the operating system recorded satisfying results during the quarter.
“Organizations using digital technology to transform and drive new growth increasingly choose Microsoft as a partner,” said Satya Nadella, Chief Executive Officer at Microsoft. “As these organizations turn to us, we’re seeing momentum across Microsoft’s cloud services and with Windows 10.”
All in on cloud
But the catalyst of Microsoft’s “strong results” wasn’t Windows, but the cloud business, which continues to improve every single quarter. And Kevin Turner, Chief Operating Officer at Microsoft, has confirmed this in a statement.
“Digital transformation is the number one priority on our customers’ agenda. Companies from large established businesses to emerging start-ups are turning to our cloud solutions to help them move faster and generate new revenue.”
Other results include an increase of Xbox Live monthly active users by 26 percent, reaching 46 million (this represents a drop of 2 million from the previous quarter), as well as a growth of 5 percent for Server products and cloud services. The biggest increase was posted by Azure, which improved revenues by no less than 120 percent, confirming that Microsoft is becoming a cloud-first company.