Microsoft announces Q2 2016 earnings, Surface revenue up by 29% but Phone sales predictably meager

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Microsoft today announce its earnings for Q2 2016. The company announced a revenue of $23.8 billion GAAP, and $25.7 billion non-GAAP, and a net income of $5.0 billion GAAP, and $6.3 billion non-GAAP. Here’s a rundown of everything from the company’s earnings report:

  • Revenue was $23.8 billion GAAP, and $25.7 billion non-GAAP
  • Operating income was $6.0 billion GAAP, and $7.9 billion non-GAAP
  • Net income was $5.0 billion GAAP, and $6.3 billion non-GAAP
  • Earnings per share was $0.62 GAAP, and $0.78 non-GAAP

According to Microsoft, “Office commercial products and cloud services revenue grew 5% in constant currency driven by Office 365 revenue growth of nearly 70% in constant currency”:

  • Office 365 consumer subscribers increased to 20.6 million
  • Office commercial products and cloud services revenue grew 5% in constant currency driven by Office 365 revenue growth of nearly 70% in constant currency
  • Dynamics revenue grew 11% in constant currency with Dynamics CRM Online seat adds more than doubling year-over-year for the fifth consecutive quarter

Revenue from the company’s cloud business also grew by 5%:

  • Azure revenue grew 140% in constant currency with revenue from Azure premium services growing nearly 3x year-over-year
  • Server products and cloud services revenue grew 10% in constant currency
  • Over one third of the Fortune 500 have chosen our Enterprise Mobility solutions, up nearly 3x year-over-year

Surface continues to impress with the latest info from the latest earnings: revenue is up by 29%. Phone revenue is down by 49%, search advertising revenue grew and Xbox Live’s active users increase, too:

  • Surface revenue increased 29% in constant currency driven by the launch of Surface Pro 4 and Surface Book
  • Windows OEM revenue declined 5% in constant currency, outperforming the PC market, driven by higher consumer premium and mid-range device mix
  • Phone revenue declined 49% in constant currency reflecting our strategy change announced in July 2015
  • Search advertising revenue excluding traffic acquisition costs grew 21% in constant currency with continued benefit from Windows 10 usage
  • Xbox Live monthly active users grew 30% year-over-year to a record 48 million

You can find the full earnings report here.

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