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Microsoft Posts Higher Sales, Lower Net Income

Redmond, Wash. — Microsoft reported higher but lower net income for the revenue quarter, ended June 30.

Net income was $4.61 billion as compared with the prior year’s $4.96 billion. Revenue was $23.38 billion for the quarter vs. the prior-year quarterly revenue of $19.89 billion.

Microsoft completed the acquisition of substantially all of the Nokia Devices and Services (NDS) business on April 25. Revenue and cost of revenue from the acquired business, including amortization of intangible assets, are reported in the new phone hardware segment.

“We are galvanized around our core as a productivity and platform company for the mobile-first and Cloud-first world, and we are driving growth with disciplined decisions, bold innovation, and focused execution,” said Satya Nadella, CEO of Microsoft. “I’m proud that our aggressive move to the cloud is paying off — our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate.”

Devices and consumer revenue grew 42 percent to $10 billion, with the following business highlights:

  • Windows OEM revenue grew 3 percent, driven by 11 percent growth in Windows OEM Pro revenue.
  • Office 365 Home and Personal subscribers totaled more than 5.6 million, adding more than 1 million subscribers again this quarter.
  • The acquired phone hardware business contributed $1.99 billion to current year revenue.
  • Bing search advertising revenue grew 40 percent, and U.S. search share grew to 19.2 percent.

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