Microsoft has reported its earnings for its second fiscal quarter of 2015 ending on December 31. Overall, the company brought in a total of $26.5 billion in revenue. That's compared to $24.5 billion in revenue from the same period a year ago.
Net income for the tech giant clocked in at $5.86 billion, compared to $6.55 billion for the same quarter a year ago. Earning per share came in at 71 cents, with Microsoft adding:
Microsoft says that devices and consumer (the groups that contain Surface and Bing) revenue shot up by 8 percent to $12.9 billion. Here are some of the highlights:
- Surface revenue of $1.1 billion, up 24%, driven by Surface Pro 3 and accessories
- Office 365 Home and Personal subscribers increased to over 9.2 million, up 30% sequentially over prior quarter
- Search advertising revenue grew 23%, with Bing U.S. market share at 19.7%, up 150 basis points over prior year
- Xbox console sales totaled 6.6 million units, with strong holiday season performance
- Phone Hardware revenue of $2.3 billion, with 10.5 million Lumia units sold driven by growth in affordable smartphones
- Windows OEM Pro revenue declined 13%; revenue was impacted by the business PC market and Pro mix returning to pre-Windows XP end of support levels and by new lower-priced licenses for devices sold to academic customers
- Windows OEM non-Pro revenue declined 13%, with license growth from opening price point devices
Additionally, the company reports that "commercial revenue grew 5 percent to $13.3 billion," driven by the following highlights:
- Commercial cloud revenue grew 114% driven by Office 365, Azure and Dynamic CRM Online, and is now on an annualized revenue run rate of $5.5 billion
- Office Commercial products and services revenue declined 1%; transactional revenue was impacted by the continued transition to Office 365 and declines in commercial PCs following the XP refresh cycle
- Server products and services revenue grew 9%, with double-digit growth of SQL Server and System Center
- Windows volume licensing revenue increased by 3%, with annuity revenue growth partially offset by declining transactional revenue
Perhaps some of the biggest news to come out of the report is that we finally have exact numbers that show Xbox One sales garnered a significant boost thanks to Microsoft's holiday promotion. 6.6 million units is certainly nothing to scoff at, however, the holiday price cut did take its toll, with Xbox platform revenue dropping by 20 percent.
On the Windows Phone side of things, Lumia devices saw quite the surge, with 10.5 million units sold in the second quarter alone, with most sales coming from the budget side of things. Overall, Windows Phone sales were up by volume, though revenue declined 61 percent on paper mostly due to a $650 million charge related to the Nokia acquisition.
Finally, on the services side of things, Microsoft reported strong growth from gaming and consumer services. For example, Microsoft saw a surge in revenue of 42 percent from Xbox Live and and 79 percent from first-party game sales. As far as consumer services are concerned, the company saw its Office 365 user base increase 30 percent over the previous quarter, while its search advertising revenue shot up by 23 percent.
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