Riding on its Cloud services, Microsoft on Friday announced revenues of $26.1 billion for the second quarter of fiscal year 2017 which exceeded analysts projections. While revenue in Intelligent Cloud (which includes its Azure cloud business) was $6.9 billion, an increase of eight per cent (up 10 per cent in constant currency) — the revenue in personal computing was $11.8 billion which decreased five per cent (down four per cent in constant currency) driven primarily by lower phone revenue, the company said in a statement.
“Our customers are seeing greater value and opportunity as we partner with them through their digital transformation. Accelerating advancements in AI across our platforms and services will provide further opportunity to drive growth in the Microsoft Cloud,” said Satya Nadella, Chief Executive Officer at Microsoft.
Microsoft said Azure revenue increased 93 per cent as the usage of Azure computing services more than doubled from the year-ago period.
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Microsoft completed the acquisition of LinkedIn Corporation on December 8, 2016. For the second quarter of fiscal year 2017, the results of LinkedIn contributed revenue, operating income, net income and diluted earnings per share of $228 million, $201 million, $100 million and $0.01, respectively, the company said.
“Server products and cloud services revenue increased 12 per cent (up 14 per cent in constant currency) driven by double-digit annuity revenue growth. Enterprise Services revenue decreased four per cent (down two per cent in constant currency) with declines in custom support agreements offset by growth in Premier Support Services and consulting,” the company noted.
Microsoft returned $6.5 billion to shareholders in the form of share repurchases and dividends in the second quarter.
“I am pleased with our results this quarter. We see strong demand for our cloud-based services and are executing well on our long-term growth strategy,” added Amy Hood, executive vice president and chief financial officer at Microsoft. Microsoft’s revenue in Productivity and Business Processes increased 10 per cent (up 12 per cent in constant currency) and was $7.4 billion.
Windows original equipment manufacturer (OEM) revenue increased five per cent and Windows commercial products and cloud services revenue increased five per cent. However, the gaming revenue decreased three per cent (down one per cent in constant currency) with lower Xbox console revenue offset by Xbox software and services revenue growth.