Article

Microsoft profits fall, but Commercial margin up on cloud services

by Jason Gumpert
Editor, MSDynamicsWorld.com

Microsoft reported second quarter earnings of $.71 per share on revenue of $26.5 billion. Revenue in the quarter was up 8% compared to the previous year, but profits fell compared to $.78 in the year-ago quarter due to expenses that included integration of Nokia Devics and Services and an IRS audit adjustment.

Microsoft 2015 Q2 earnings Commercial

Commercial revenue, which includes Microsoft Business Solutions, was up 5% to $13.3 billion. Commercial cloud revenue grew 114% and is now on an annualized revenue run rate of $5.5 billion, according to the company's earnings statement. Commercial cloud includes Office 365, Azure, and Dynamics CRM Online and was part of the "Commercial Other" segment that generated $2.59 billion in revenue, up 46% from the previous year's second quarter. Last quarter, this segment grew 128%.

Microsoft also noted "increased Azure usage and revenue, and strong momentum in our enterprise mobility workloads," in their earnings slides.

"We again saw enthusiasm and demand around our cloud offerings like Office 365, Dynamics CRM Online and Azure, as well as Surface Pro 3," said Kevin Turner, chief operating officer at Microsoft. "Our sales engagement worldwide continues to focus on helping customers and partners transition to the cloud and navigate the shifting product mix related to our services and solutions."

Other commercial revenue notes from the press release include:

  • 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

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About Jason Gumpert

As the editor of MSDynamicsWorld.com, Jason oversees all editorial content on the site and at our events, as well as providing site management and strategy. He can be reached at jgumpert@msdynamicsworld.com.

Prior to co-founding MSDynamicsWorld.com, Jason was a Principal Software Consultant at Parametric Technology Corporation (PTC), where he implemented solutions, trained customers, managed software development, and spent some time in the pre-sales engineering organization. He has also held consulting positions at CSC Consulting and Monitor Group.

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