Microsoft shares jump after strong second quarter results

Azure’s revenue jumped 140%, while Office 365 expanded by 70% and now boasts 20.6 million consumer subscribers.

Total revenue, however, fell 10.1 per cent to $23.80 billion, squeezed by a strong dollar as well as a weak personal computer market that has reduced demand for Microsoft’s Windows operating system.

The most significant decline was a fall in phone revenue of 49% in constant currency. Last quarter, the company reported $9.4 billion in revenue for this group.

Intelligent Cloud covers Microsoft’s Azure public cloud services, Enterprise Mobility solutions, and enterprise software and services, so includes figures for the Windows Server operating system, which saw revenue growth of 10 percent in constant currency, Microsoft said.

Although Microsoft said Xbox hardware revenue fell because of lower volumes of Xbox 360 sales, it wouldn’t get specific about the number of next-generation consoles it sold during the recent quarter.

Chief Executive Satya Nadella has focussed on cloud services and mobile applications on slower growth in its traditional software business. The company just published their Q2 fiscal 2016 earnings report, and according to them, they made $6.3 billion in net income on $25.7 billion in revenue. Windows Continuum, which allows its mobile phones to be connected to a monitor for a PC experience powered by Windows 10, is one of the features the company is banking on.

Additionally, the company’s offerings with its XBox Live gaming service has now reached 48 million users, a 30% increase when compared to the same time previous year.

The world’s largest payments network operator posted earnings of $0.69 per share on revenues of $3.57 billion, up 5.4% from a year ago. “Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices”, added Nadella.

Shares rose in after-hours trading, changing hands recently at $55.01, up $2.95 or more than 5 percent.

Last quarter, Microsoft also announced that its commercial cloud business was on an $8.2 billion annual run rate, up from $8.2 billion in its last financial quarter of 2015.

“Our commercial business executed well as our sales teams and partners helped customers realise the value of Microsoft’s cloud technologies”.