Microsoft this afternoon announced non-GAAP holiday quarterly revenue of $25.7 billion, net income of $6.3 billion and $0.78 EPS. These numbers beat both top and bottom line consensus analyst estimates. The company’s stock is up in after-hours trading.
Bing search revenue grew 21 percent (but was down sequentially), boosted by Windows 10 adoption according to the company. Mobile phone revenues were down 49 percent.
Sales of Surface Pro 4 and Surface Book generated revenue growth of 29 percent year over year. Cloud services (Azure) grew 140 percent. Office 365 saw 70 percent revenue growth and now has 20 million consumer subscribers.
Here are some of the segment highlights verbatim:
- Search advertising revenue ex-TAC grew 21 percent in constant currency with continued benefit from Windows 10 usage
- Windows OEM revenue declined 5 percent in constant currency, outperforming the PC market, driven by higher consumer premium and mid-range device mix
- Surface revenue increased 29 percent in constant currency driven by the launch of Surface Pro 4 and Surface Book
- Phone revenue declined 49 percent in constant currency reflecting our strategy change announced in July 2015
- Office 365 consumer subscribers increased to 20.6 million
- Azure revenue grew 140 percent in constant currency with revenue from Azure premium services growing nearly 3x year-over-year
- Xbox Live monthly active users grew 30 percent year-over-year to a record 48 million
As with Apple and other US companies operating internationally, “currency headwinds” took a toll on Microsoft’s earnings. Performance was better in constant currency vs actual currency, whose volatility is the result of global economic instability.
Check back at 5:30 Eastern for notes from the earnings call.
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