Microsoft Q2 Buoyed By Azure, Office 365 Gains

Microsoft saw sales of its Lumia handsets more than halve year on year to just 4.5 million during the final three months of 2015. Microsoft said this was driven by the launch of the new Surface Pro 4 and Surface Book laptop towards the end of the year. Office 365 now has 20.6 million subscribers, which was a major contributor to the success of the sales of Productivity and Business Processes (PBP), which rose to $6.7 billion in value, from $6.3 billion in the last quarter.

Intelligent Cloud, which includes Enterprise Services and service revenue, made $6.4 billion compared to $5.9 billion in the previous quarter.

For its second fiscal quarter, which ended on December 31, the company reported net income of almost $5 billion, or 62 cents a share, compared with $5.86 billion, or 71 cents a share, during the same period a year earlier.

The cloud outshone all other areas of the business.

Microsoft’s CEO Satya Nadella says that the company expects a strong next quarter, specifically thanks to Windows 10, as businesses are now looking into the operating system and piloting it for further deployment. Microsoft’s headline figures were heavily impacted by the strong United States dollar so it often referenced non-GAAP constant currency figures this time around to put a positive spin on things.

Revenue was $25.69 billion, topping estimates of $25.26 billion.

Tencent, the Chinese messaging service, has announced in a blog post that it is dropping support for Windows 10 Mobile, the version of the operating system that works on phones.

Likewise, Microsoft did not fully reveal Office 365 cloud service sales. Those include its cloud-computing segment, which lets commercial customers run their businesses on Microsoft’s servers, and the division that sells PC software, Surface tablets and Xbox gaming consoles. Microsoft released Windows 10 in July. Ms. Hood said Thursday that 30% of all search revenue derived from Windows 10 devices, meaning the platform is contributing at least $300 million to Microsoft’s search business. The massive increase was due to the better sales performance of the Surface line of Microsoft, which returned $1.35 billion in revenue to the company in the last quarter for an improvement of 29 percent.