Microsoft’s Surface division grows in strong Q2

microsoft, windows, cloud, lumia, microsoft surface, financials

Microsoft’s financial results for the second quarter of their fiscal 2016 (Q4 of calendar 2015) are in, and the company has reported GAAP revenues of $23.8 billion ($25.7 billion non-GAAP) for profits of $5.0 billion ($6.3bn non-GAAP), beating estimates.

The Surface division was one of the highlights of Microsoft’s most recent quarter. While it’s still far from the company’s largest business, revenue from Surface devices grew 29 percent year on year to $1.35 billion on the back of good Surface Pro 4 and Surface Book sales.

On the flip side, Microsoft’s phone division is tanking. The company only managed to sell 4.5 million Lumias in the last quarter, with revenues down 49 percent year on year. Part of this can be attributed to a lack of compelling device launches in 2015, and a change of strategy revolving around Windows 10 Mobile.

The star of the show for Microsoft was its cloud business. Azure revenues are up 140 percent in constant currency, with the entire server division growing by 10 percent. Office 365 is also doing well, with subscribers now topping 20.6 million with revenue growth of 70 percent in constant currency.

The “More Personal Computing” division saw revenues decline by five percent, due partly to declines of five percent in the Windows OEM division, which Microsoft say has “outperformed the PC market”.

News of Microsoft’s strong Q2 results led to an spike in their share price during after hours trading, although CEO Satya Nadella hasn’t provided forward guidance just yet.

Leave a Reply

Your email address will not be published. Required fields are marked *