Windows 10 now has 500 million monthly active users, and the enterprise and education deployments of Windows 10 increased 33% for the quarter ended June 30, 2017 (Q4 FY17), Microsoft CEO Satya Nadella said during the company’s earnings call. During the quarter, Microsoft had also launched Windows 10 S, specifically targeted as educational institutions. Nadella said that “our goal for Windows 10 S is to develop a vibrant ecosystem with partners like Acer, ASUS, Dell, Fujitsu, HP, Samsung, and Toshiba to introduce a new class of modern devices that enable affordable, powerful new scenarios from Windows ink to 3D.”
Revenues from Microsoft’s cloud business Azure grew 97% year-on-year (YoY) for the quarter. Nadella said that “and we keep investing in cloud computing to create broader economic benefit and opportunity, as we’ve done with our South Africa datacenter expansion, bringing Azure to 40 regions globally.”
Microsoft’s server products and cloud services (part of the Intelligent Cloud segment) revenue grew $764 million or 15%, driven by Azure revenue growth. Azure had registered a 93% increase in service revenue for the three months ended March 31, 2017.
In June, Microsoft and Box Inc. partnered to offer Box cloud content management with Azure to enterprise customers, which is expected to available later this year. In this regard, Nadella said, “Box announced that it will bring its content and collaboration services to Azure and plans to use our AI to simplify discovery and use of all types of content across the enterprise. And Baidu will use Azure to take its autonomous driving platform worldwide.”
“We saw continued momentum in mobile and strong engagement across the platform, with sessions up more than 20 percent for the third consecutive quarter” … “We launched a new messaging overlay resulting in record levels of messages sent on LinkedIn, and introduced a career advice marketplace that will let members easily tap into the professional expertise of more than 500 million members around the world. On top of that, Talent Solutions saw record level growth in confirmed hires and InMail response rates this quarter.”
LinkedIn contributed revenues of $1.1 billion in the quarter, or 4.72% of Microsoft overall revenues of $23.3 billion. LinkedIn’s revenues were driven by revenue from Talent Solutions.
On Gaming and Xbox
Xbox Live now has over 53 million users. During the quarter, the company had launched two news services:
- Mixer – a live streaming service, which allows gamers to create and share across platforms, plus interact in new ways.
- Xbox Game Pass – a digital subscription service.
Revenues from gaming increased by $44 million or 3% on the back of Xbox software and services, though Xbox hardware revenue was lower. Xbox software and services revenue increased 11%, primarily due to a higher volume of Xbox Live transactions. Xbox hardware revenue decreased 29%, driven by lower prices and a decline in volume of consoles sold.
Earlier this month, after about a week of speculations, Microsoft confirmed that there will be thousands of layoffs at the company. The layoffs will be primarily is sales and amount to less than 10% of the company’s total sales force, and about 75% of these will be jobs outside of the US. Our calculations, based on Microsoft’s total headcount and number of employees in its sales force worldwide, showed that there will about 2000 job cuts worldwide.
– Microsoft reported overall revenues of $23.3 billion during Q4 FY17, up 13.1% YoY from $20.6 billion in the same quarter last year (Q4 FY16).
– Net Income for the quarter stood at $6.5 billion, which is more than double the net income of $3.1 billion reported in Q4 FY16.
– Productivity and Business segment accounted for revenues of $8.45 billion for the quarter, up 21% YoY from $6.97 billion.
– Intelligent cloud business posted revenues of $7.4 billion during Q4FY17, up 11% from $6.7 billion in the same quarter last year.
– Personal computing segment revenues were $8.2 billion for the quarter, down marginally down by 2% from $8.9 billion.