Microsoft Q4 strong, Office 365 consumer subscriptions top 23 million

The company delivered strong cloud growth, as its Office 365, Dynamics, and Azure products and services chugged along.

msft-q4-2016-a.jpg

Microsoft CEO Satya Nadella said the company is managing its digital transformation well.

Image: Microsoft

Microsoft reported better-than-expected fourth quarter results. It had 23.1 million Office 365 consumer subscribers, grew Azure cloud revenue 102 percent from a year ago, and delivered Surface revenue growth of 9 percent.

The software giant reported fourth quarter earnings of $3.1 billion, or 39 cents a share, on revenue of $20.6 billion. Non-GAAP earnings for the fourth quarter was 69 cents a share on non-GAAP revenue of $22.6 billion.

Microsoft CEO Nadella: Windows 10 is an IoT play too

Windows 10 is a key part of Microsoft's plan to be more of an Internet of things player. The catch is that few people see Microsoft putting the pieces together.

Read More

Microsoft was expected to deliver fourth quarter non-GAAP earnings of 58 cents a share on revenue of $22.15 billion. Analysts were looking for color on the LinkedIn purchase as well as how it would be integrated into its ERP platform, to be named Dynamics 365. Pacific Crest analyst Brendan Barnicle said that resellers were indicating strong Office 365 and Dynamics demand for the quarter as well as a good pipeline for Azure.

As for growth, Microsoft's Intelligent Cloud unit delivered the best results, up 7 percent from a year ago. Productivity (Office, Dynamics) had growth of 5 percent, and the more personal computing division (Windows 10), saw sales fall 4 percent.

In a statement, CEO Satya Nadella said the company is managing its digital transformation well.

For fiscal 2016, Microsoft reported net income of $16.8 billion, or $2.10 a share, on revenue of $85.3 billion. Non-GAAP revenue, which reflects Windows 10 sales deferrals, was $92 billion. The company's results were helped by lower tax rates abroad.

By unit, the intelligent cloud unit saw Azure revenue grow 102 percent with compute usage doubling. Enterprise mobility customers totaled 33,000 at the end of the quarter.

Here's a look at the key charts.

msft-q4-intelligent-cloud.jpg
Image: Microsoft
msft-q4-productivity-2016.jpg
Image: Microsoft
msft-q4-trended-2016.jpg
Image: Microsoft

Related:

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All