Microsoft revenue dips 10% to $23.8 bn in Dec quarter

Microsoft posted its second-quarter 2016 earnings report Thursday, and shareholders had reason to be pleased.

“Our expectation for the PC market is roughly in line with most analysts”, Ms. Hood said. Analysts predicted Redmond would report sales of $25.3 billion, a decline from $26.5 billion in the same period one year prior, and $0.71 earnings per share.

At this point, steady Office 365 growth is not much of a surprise.

So highly, in fact, that in coming weeks, PC owners who have set their machines to automatically install important updates like security fixes could find the new operating system already downloaded and ready for activation.

Productivity and Business Processes would have produced revenue growth if currency exchange values had been constant.

Commercial Office 365 revenue growth was up 70 percent and the consumer version of the service had 20.6 million subscribers.

Microsoft did not offer guidance in its press release, but said that it would provide guidance during its conference call later this afternoon.

Indeed, the launch of the Surface Pro 4 and Surface Book helped boost overall Surface sales 29 percent in constant currency to $1.35 billion, up more than double from the previous quarter’s $672 million. Three-quarters of Dynamics CRM customers are deploying in the cloud, Nadella said.

Here’s a look at how Windows and Surface fared.

Revenue from the “intelligent cloud” business, which includes products such as its Azure cloud infrastructure and services business, along with other noncloud products such as traditional servers, rose 5% to $6.3bn. In constant currency, revenue grew 11%. But the big highlight was Azure revenue, which grew 140 percent, including revenue from Azure premium services growing almost 3x year-over-year.

Demand for cloud services continues to skyrocket.

The goal is to get people using Microsoft’s latest products, no matter what kind of device they prefer, said Frank Gillett, a tech analyst with Forrester Research.

Revenue from Productivity & Business segment declined 2%, down to $6.7 billion, as opposed to the 3% decline in the quarter prior, as the company transitioned from software licensing to Office 365 subscriptions for clients.

However, investors were pleased with the results even though revenues and profits fell.