Microsoft Q1 solid amid Azure, Office 365, Windows Server gains

Chief Executive Satya Nadella said in prepared remarks Thursday that the company was “making strong progress across each of our three ambitions”.

Revenue in the three months ending in September declined 7%, year over year, to $21.66 billion, yielding EPS of 67 cents.

This quarter also marked a change for how Microsoft reports earnings.

“Even though Microsoft has come out with a device, it speaks to Dell’s interest in being a massive provider and playing in everything they can, and that’s great for partners”, Serpico said.

Microsoft (MSFT) this afternoon reported fiscal Q1 revenue and earnings per share that topped analysts’ expectations, sending its shares sharply higher in late trading.

This marked Microsoft’s first earnings report under its new reporting structure, something analysts have been looking forward to for a few time.

Microsoft’s Intelligent Cloud business saw an eight-percent increase, reaching $5.9 billion, with revenue from server products and cloud services, and Azure more than doubling year over year. That’s largely driven by Office 365, which is good, but it’ll be a while before all that money makes its way into Microsoft’s earnings. The launch of Windows 10, it says, has helped the ecosystem and is pushing people toward more expensive computers.

Windows 10 is now running on 110 million devices, according to Microsoft, although it hasn’t said how many are new PCs and how many are older machines whose owners took advantage of the free upgrade. The other combines data center software with cloud services, in which companies use software housed on Microsoft’s servers. It should be no surprise that, pushed aside under Nadella, Microsoft’s phone revenue is tanking, falling 54 percent year over year.

The new Dell One Identity Cloud Access Manager 8.1 enables secure access to all internal and cloud-based web applications, enforcing security policies and controls while improving user productivity, and the new version adds SaaS-based, multi-factor authentication via Defender as a Service.

Productivity & Business Processes (Office/Office 365 and Dynamics apps) revenue fell 3% Y/Y (+4% exc. forex), with sales pressured by the shift from up-front licenses to cloud subscriptions. Windows OEM revenue declined by 6 percent, but the company noted that this means it is doing better than the PC market as a whole.

“Michael talked about all the other things that he will do along with EMC but we believe that by providing the choice that speaks to the realities of our customers, we will not only drive our partnership and our success but, more importantly, address the needs of our customers”, he said.