14 DAY TRIAL // Microsoft has recently published its financial results for the second quarter of fiscal year 2016, revealing net income of $6.3 billion (€5.7 billion) and revenues of $25.7 billion (€23.5 billion).
While at first glance Microsoft’s figures point to rather strong results, the company’s products had mixed performance during the quarter, and while some achieved record sales, others collapsed.
Specifically, Microsoft says that its Productivity and Business Processes division lost 2 percent in revenues to settle at $6.7 billion, with Office itself growing 5 percent and Office 365 achieving 20.6 million consumer subscribers.
The Intelligent Cloud business improved by 5 percent, Microsoft says, with server products and Azure growing 10 percent and 140 percent, respectively.
And now comes the more interesting part.
“More Personal Computing” revenues
Despite the arrival of Windows 10, the company’s Windows OEM revenue dropped 5 percent during the quarter, but Microsoft says that it actually “outperformed the PC market, driven by higher consumer premium and mid-range device mix.” In other words, both Windows and the PC market went down during the quarter, but the operating system declined less.
Surface is the best performer of the quarter, managing to increase sales by no less than 29 percent. 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.
For Windows Phone fans, however, there’s terrible news. The phone revenue declined 49 percent during the quarter because of what Microsoft calls “our strategy change announced in July 2015.” In other words, Microsoft’s new strategy to focus on just 3 phone categories and rely on universal apps for Windows 10 Mobile is the main reason for this drop, and the company kind of expected it.
And yet, Redmond doesn’t consider these results to be disappointing at all and prefers to see the glass half full.
“It was a strong holiday season for Microsoft highlighted by Surface and Xbox,” explains Kevin Turner, chief operating officer at Microsoft. “Our commercial business executed well as our sales teams and partners helped customers realize the value of Microsoft’s cloud technologies across Azure, Office 365 and CRM Online.”
Microsoft’s CEO Satya Nadella says that the company expects a strong next quarter, specifically thanks to Windows 10, as businesses are now looking into the operating system and piloting it for further deployment.