Microsoft Posts Excellent Q1 2014 Financial Results

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So, Microsoft’s earnings report for Q1 2015 has been released. The numbers will be sliced and diced by analysts and others over the next few days, but generally they seem extremely positive. Revenues were up 25% to $23.2 billion while operating income was down 8% to $5.8 billion given ongoing costs to restructuring and the Nokia acquisition. Some highlights:

Devices and Consumer revenue grew 47% to $10.96 billion, with the following business highlights:

– Office 365 Home and Personal subscribers totaled more than 7 million, representing more than 25% sequential growth over the previous quarter.
– Surface Pro 3 momentum drove Surface revenue of $908 million.
– New Windows consumer licensing programs drove positive unit growth while OEM non-Pro revenue declined 1%.
– Total Xbox console sales were 2.4 million, growing 102%, and Xbox One launched in 28 new markets.
– Phone hardware revenue exceeded $2.6 billion with ongoing focus on execution discipline.

Commercial revenue grew 10% to $12.28 billion, with the following business highlights:

– Server products and services revenue increased 13%, with double-digit growth for SQL Server, System Center and Windows Server.
– Office Commercial products and services revenue grew 5% as customers transition to Office 365.
– Commercial cloud revenue grew 128% driven by Office 365, Azure and Dynamics CRM.
– Lync, SharePoint and Exchange, our productivity server offerings, collectively grew double-digits.
– Windows volume licensing revenue increased 10%.

Of particular interest to me is the Surface revenue of $908 million, driven by Surface Pro 3 sales. Given past sales results, this is impressive indeed and demonstrates that Microsoft has done a great job of building and marketing a machine that demonstrates the strengths of the Windows platform. Overall, Microsoft is doing extremely well across both consumers and businesses, demonstrating that their strategy, at least so far, is winning.

It’s a great time to be a Microsoft proponent.

 

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  1. […] Microsoft just announced their Q1 2015 financial results, and they did quite well. Relative to this post, the fact that 7 million consumers are subscribing to Office 365 is […]

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