Why Microsoft revenue dipped 12% in Sept quarter

Microsoft CEO Satya Nadella
Software major Microsoft said its revenue fell 12 percent to $20.4 billion in the first quarter ended September 30, 2015, while net income rose 2 percent to $4.5 billion.

Satya Nadella, chief executive officer at Microsoft, said: “Customer excitement for new devices, Windows 10, Office 365 and Azure is increasing as we bring together the best Microsoft experiences to empower people to achieve more.”

Revenue in Productivity and Business Processes declined 3 percent to $6.3 billion.

Office commercial products and cloud services revenue grew 5 percent with Office 365 revenue growth of nearly 70 percent.

Office 365 consumer subscribers increased to 18.2 million, with approximately 3 million subscribers added in the quarter.

Dynamics revenue grew 12 percent, with the Dynamics CRM Online enterprise installed base growing more than 3x.
Revenue in Intelligent Cloud grew 8 percent to $5.9 billion.

Server products and cloud services revenue grew 13 percent, with revenue from premium products and services growing double-digits.

Azure revenue and compute usage more than doubled.

Enterprise Mobility customers more than doubled to over 20,000, and the installed base grew nearly 6x.

Revenue in More Personal Computing declined 17 percent to $9.4 billion.

Windows OEM revenue declined 6 percent, performing better than the overall PC market, as the Windows 10 launch spurred PC ecosystem innovation and helped drive hardware mix toward premium devices.

Phone revenue declined 54 percent.

Search advertising revenue excluding traffic acquisition costs grew 29 percent with Bing US market share benefiting from Windows 10 usage.

Xbox Live monthly active users grew 28 percent to 39 million

“We’re seeing great traction with businesses who want to bring Microsoft’s cloud, mobile device management technology and data analytics together to improve security and productivity resulting in almost 70 percent growth in our commercial cloud run rate,” said Kevin Turner, chief operating officer at Microsoft.

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