microsoft1

Microsoft has reported a profit of $3.8 billion for the quarter ended March 31, 2016 (Q3 FY16), a 25% decline from $5 billion last year. The total revenues for the quarter stood at $20.5 billion, down 6% from $21.72 billion the corresponding quarter last year. The operating income of the company stood at $5.3 billion, a 20% decline from $6.6 billion last year.

Here are a few takeaways from their earnings and call with analysts:

Cloud business:

Azure revenue grew 120% with the usage of the platform doubling year over year. Microsoft CEO Satya Nadella said that “The IoT market is expanding as companies look to deliver new services and value. Our new Azure IoT suite streamlines the process of building IoT applications and acts as the hub for managing and monitoring millions of assets. Each week more than two trillion IoT messages are processed by Azure.”

He added that Microsoft had expanded its Cortana Intelligence Suite, it’s big big data and analytics service, to include over 20 cognitive services ranging from object and emotion recognition to text and linguistic analysis.

Increase in Windows 10 adoption:

Nadella mentions that Microsoft crossed over 270 million active devices running Windows 10 this month. He added that the US Department of Defense will upgrade all their devices to Windows this year. Window Store received more than 5 billion visits. Nadella said that Windows will now also focus on developer tools.

“To this end we are making Windows and Azure the very best environment for developers who want to build applications that run across multiple platforms. Our acquisition of Xamarin and the inclusion of Bash in Windows 10 will make it easier to build intelligent experiences and apps that leverage our cloud and run natively on Windows, iOS, and Android.”

Office 365:

Consumer subscriptions of Office grew to more than 22 million. Commercial Office 365 customers surpassed 70 million monthly active users. Nadella added that Microsoft will expand in new markets like security, analytics and cloud voice.

“For example, the cyber security market is expanding rapidly and it is a place where we have unique capabilities, like Advanced Threat Protection, Cloud App Security, and Advanced e-Discovery. This combination drove a 35 percent quarter over quarter growth of monthly active users of our premium information protection services in Office 365” Nadella said.

Xbox Live:

In gaming monthly active users of Xbox Live grew 26 percent year-over-year, which the company attributes to the growth of Xbox One and Windows 10. “We continue to create synergies between Xbox One and Windows 10 devices. Bringing top Xbox One titles to Windows store helped grow gaming hours on Windows 10 by 50 percent over last quarter. And starting this summer Universal Windows Apps will run on Xbox One making it easy to build applications and games that work across devices,” said Nadella.

***

Financials:

– Revenue in More Personal Computing increase by 1% to $9.5 billion year on year (YoY).

– Revenue in Intelligent Cloud grew 3% to $6.1 billion YoY.

– Revenue in Productivity and Business Processes increased 1% to $6.5 billion YoY.

Download: Press Release | Transcript

Image source: Flickr user Michael Kappel under CC BY-NC 2.0