Microsoft today said its fourth quarter revenue rose 18 percent to $23.38 billion, while net income grew 7 percent to $6.48 billion.
Its revenue includes $2 billion from the Nokia phone hardware segment.
North America and Europe contributed to the revenue growth of Microsoft. “We did, however, see challenging conditions in China or like many other multinationals we’re experiencing a weak business environment which we do not expect to change in the near term,” said Amy Hood, executive vice president and chief financial officer at Microsoft.
Microsoft said commercial cloud revenue grew 147 percent, driven by both Office 365 and Azure. Its commercial cloud annual revenue run rate more than doubled this year and now exceeds $4.4 billion.
The IT vendor added over 1 million new subscribers to Office 365, Home and Personal and ended the quarter with 5.6 million users. Azure has also grown dramatically, with storage doubling and compute tripling this year, said Microsoft.
Over 50 percent of Azure customers are now also using higher value services like the Enterprise Mobility Suite, which are seeing strong adoption since the May launch.
“In addition to transitioning to the cloud, our customers continue to invest in premium versions of our on-prem server products like Window Server, System Center and SQL Server. As a result, our server licensing revenue grew 14 percent this quarter,” Hood added.
This quarter OEM revenue grew 3 percent as the commercial hardware refresh cycle continue with businesses updating their devices and renewing their commitment to the Windows platform. XP end of support contributed to the double-digit growth in both Windows Pro and volume licensing, though the benefits moderated throughout the quarter.
This quarter, Lumia device sales were primarily driven by good performance in the lower price point 500 and 600 series.
Sales of non-Lumia devices were in line with the overall feature phone market dynamics. Its gross margins were impacted due to rationalization of the device portfolio, as well as acquisition related amortization expense.
Devices and Consumer revenue grew 42 percent to $10.00 billion.
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.
Commercial revenue grew 11 percent to $13.48 billion.
Commercial cloud revenue grew 147 percent with an annualized run rate that exceeds $4.4 billion.
Windows volume licensing revenue grew 11 percent.
Server products revenue, including Azure, grew 16 percent, with double-digit growth for SQL Server and System Center.