Microsoft Earnings Report Highlights Surface Success and Windows Phone Failure

Microsoft has announced its second quarterly earnings report for the fiscal year 2016, and it seems largely a mix of fortunes. While on one hand, the relatively new Surface investment is finally paying off, the long-featured Lumia smartphone sales are struggling to stay in the same picture. Here are other things that Microsoft Earnings report revealed for the tech giant’s current fiscal year.

What We Learnt from Microsoft’s Earnings Report

For one, the company saw 10 percent less revenue as the same time last year, at $23.8 billion. Concurrently, the profit level decreased by 15 percent to $5 billion. Right now Microsoft is seeing a shift towards cloud-based services, and that is paying off nicely so far, with Azure earnings up 140 percent, and overall Intelligent Cloud by five percent.

The “pet” in the matrix remains the Windows Phone line, which strikingly saw sales of just 4.5 million in the last quarter, down from 10.5 million last year. The revenue earned from this division also fell by 49 percent. According to Benedict Evans, the sales for the OS so far stand at a paltry 110 million. During the same time period, iOS and Android have seen sales in excess of 4.5 billion units.

Not all was bad though. The positive publicity and the hard effort which Surface is earning is reflecting well on its sales. Revenue was up by 29 percent over the last quarter, from $1.1 billion to $1.35 billion right now, but as most people will say, there is likely potential for more. Microsoft believes that the new $4,500 variant of the Surface Book can bolster future earnings.

Other divisions did relatively well too. Xbox monthly active users increased by 30 percent to 48 million monthly active users. Office 365 revenue jumped by 70 percent over last year and now has 20.6 million users, while Windows OEM Pro revenue dropped by 6 percent, which is still lesser than the 13 percent it did last year.

Microsoft continues to move away its traditional earning mediums such as Windows and Office. However, Windows must have sustainable growth too for a better and stable future for the tech giant.

As things stand, it is still too early to predict anything as far as Microsoft’s future plans go.