Microsoft's Q2: LinkedIn In, Mobile out, Azure up, Xbox down
Cloud jump helps SatNad and Co keep revenues gaining
Microsoft is crediting growth in its cloud services with helping it to top expectations for the quarter.
For Redmond's 2017 Q2, the returns were mostly strong, though enterprise services and Xbox sales were down:
- Revenues of $24.1bn were up 1 per cent from Q2 2015.
- Net income of $5.2bn was up 5 per cent on the year-ago quarter.
- Earnings per share (non-GAAP) of $0.83 were ahead of analyst estimates at $0.79.
In rolling out the numbers, Microsoft made sure to highlight the jumps in revenue for its cloud business. Azure revenues increased by 93 per cent over last year's quarter, and Office 365 revenues grew by 47 per cent.
"Our customers are seeing greater value and opportunity as we partner with them through their digital transformation," said CEO Satya Nadella. "Accelerating advancements in AI across our platforms and services will provide further opportunity to drive growth in the Microsoft Cloud."
Though growing, that "intelligent cloud" unit remains a relatively small portion of Microsoft's overall business, with $6.9bn of the $24.1bn revenue take.
There were, also, a number of drags on Microsoft this quarter. Enterprise services (including business support services) were down 4 per cent from the year-ago quarter, while the games unit dropped by 3 per cent thanks to drops in Xbox hardware revenue.
The "more personal computing" group, a category that includes the games group as well as Windows OEM sales and mobile, saw revenues drop by five per cent to $11.8bn. Microsoft blames this in large part on the 85 per cent drop in revenues from the largely defunct Windows phone environment.
This also marks the first quarter that LinkedIn has appeared on Redmond's books. Microsoft estimates the Facebook-for-suits operation brought $228m in revenues, but ended up with a net loss of $100m due to intangible asset write-offs. ®
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