Microsoft's last quarter saw the company pull in $26.47 billion in revenues, beating the previous quarter and the same quarter last year's figures by $3.27 billion and $1.95 billion respectively. The gross margin is up 1 percent year-on-year to $16.33 billion, though operating income is down 2 percent to $7.78 billion, with the diluted earnings per share at $0.71, down nine percent.
Devices and Consumer revenue grew 8 percent to $12.9 billion, with Surface revenue alone increasing 24 percent to $1.1 billion, thanks to the Surface Pro 3 and accessories. Combined Xbox One and Xbox 360 sales amounted to 6.6 million, which Microsoft considers a "strong holiday season performance." Phone hardware sales of 10.5 million Lumia devices has been attributed to "affordable smartphones," with overall revenue of $2.3 for the arm.
The software side of the company has mixed fortunes. Office 365 Home and Personal subscriptions increased by 30 percent compared to the previous quarter to over 9.2 million, and in search, advertising revenue is up 23 percent with Bing's US market share up 150 basis points over last year at 19.7 percent. Windows OEM Pro revenue dropped 13 percent as it was "impacted by the business PC market and Pro mix returning to pre-Windows XP end of support levels and by new lower-priced licenses for devices sold to academic customers. Windows OEM non-Pro revenue declined by 13 percent as well, though there is "license growth from opening price point devices."
Commercial revenues are also up five percent to $13.3 billion, with a three-percent increase in Windows volume licensing revenue, nine-percent growth for server products and services, and an increase of 114 percent for commercial cloud revenue, thanks to Office 365, Azure, and Dynamic CRM Online. Office Commercial products and services revenue dropped by just one percent, with a continued transition to Office 365 and "declines in commercial PCs following the XP refresh cycle" to blame for the blip.
"Microsoft is continuing to transform, executing against our strategic priorities and extending our cloud leadership," said CEO Satya Nadella in a statement. "We are taking bold steps forward across our business, and specifically with Windows 10, to deliver new experiences, new categories, and new opportunities to our customers."
Despite mostly favorable results, as well as effectively meeting analyst expectations, the stock value is down by approximately three percent at the time of publication.