Microsoft Q1 revenue up 25%, operating income drops 8%

Software vendor Microsoft today said its first quarter revenue in fiscal 2015 rose 25 percent to $23.2 billion, while operating income dropped 8 percent to $5.84 billion.

Excluding Nokia phone business, Microsoft revenue growth would have been 11 percent.

These financial results include $1.14 billion of integration and restructuring expenses related to both Microsoft’s restructuring plan announced in July 2014 and the integration of the Nokia Devices and Services (NDS) business.

“We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,”  said Satya Nadella, chief executive officer of Microsoft.

Microsoft said its Devices and Consumer revenue grew 47 percent to $10.96 billion.

Office 365 Home and Personal subscribers totaled more than 7 million, representing more than 25 percent sequential growth over the previous quarter.

Surface Pro 3 was the growth driver to post revenue of $908 million from Microsoft’s Surface tablet business in Q1 of fiscal 2015.

Microsoft CEO Satya Nadella

New Windows consumer licensing programs drove positive unit growth, while OEM non-Pro revenue declined 1 percent.

Total Xbox console sales grew 102 percent to 2.4 million. Microsoft launched Xbox One in 28 new markets.

Phone hardware revenue exceeded $2.6 billion with ongoing focus on execution discipline.

Commercial revenue grew 10 percent to $12.28 billion.

Server products and services revenue increased 13 percent, with double-digit growth for SQL Server, System Center and Windows Server.

Office Commercial products and services revenue grew 5 percent as customers transition to Office 365.

Commercial cloud revenue grew 128 percent 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 percent.

Growth drivers

Microsoft cloud cloud revenue grew a 128 percent. An 80 percent of the Fortune 500 are now on the Microsoft Cloud.

Office 365 commercial seats nearly doubled, two out of every three new customers see premium versions. Consumer Office 365 now exceeds 7 million subscribers, up more than 25 percent for the last quarter alone.

More than 60 percent of the Azure customers are using at least each one of these premium services such as Enterprise Mobility Suite, which is off to a very fast start.

“Windows 10 will be the most collaborative version of Windows we have ever shipped,” Nadella said.

Rajani Baburajan
[email protected]

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