Microsoft Sees Windows 10 Increase Demand For Bing

A division it calls “Intelligent Cloud”, which includes both Azure cloud business and Windows Server software sales, filed revenues of $6.3bn in the quarter, up by five per cent.

Overall, the Productivity business was down 2% from last quarter, but Office 365 continues to grow and make up for some of the shortfall with 20.6 million consumer subscribers.

The future of Microsoft’s device business is left uncertain after its latest quarterly report revealed that sales of its flagship Lumia phones plummeted by more than 50 per cent in a year.

Revenue was down to $23.8bn and profit fell to $5bn, mainly as a result of the strong dollar and shrinking PC market that has affected the fourth-quarter results of most USA tech firms.

Microsoft’s revenue in Productivity and Business Processes, which includes Microsoft Office services, fell two percent, with Microsoft Dynamics revenue growing 11 percent in constant currency. 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.

Microsoft’s aggressive campaign to promote Windows 10 has led to its deployment on more than 200 million devices since its July release. The company pulled in revenue of $25.7 billion in constant currency, and $0.78 earnings per share.

During the quarter Microsoft said it returned $6.5 billion to investors via share repurchases and dividends.

Looking ahead, Microsoft expects to see a further shift towards cloud and services in its revenue results for the current quarter.

“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas”, said Satya Nadella (pictured), Microsoft’s CEO, in a statement.

Over one third of the Fortune 500 have chosen our Enterprise Mobility solutions, up almost 3x.

The segment consisting of Windows, hardware, search, and gaming pulled in $12.7 billion in revenue, marking a decline of 5% year over year (down 2% in constant currency).

Office commercial products and cloud services revenue rose 5 percent driven by Office 365 revenue growth of almost 70 percent. And finally Xbox Live active users grew to 48 million, that’s 30 per cent up year-on-year.

“It was a strong holiday season for Microsoft, highlighted by Surface and Xbox”, said COO Kevin Turner.