Microsoft earnings are out, and the big stuff is right in line.
- GAAP revenue is $US20.04 billion, which is flat y/y, which is exactly in line with expectations
- GAAP EPS is $US0.68, down 6% y/y, which is a beat of expectations of $US0.63.
On a non-GAAP basis, revenue and operating income were both up.
The difference between the GAAP and non-GAAP results are related to comparisons from last year. In the year-ago quarter, there was deferred revenue, which Microsoft doesn’t think should be included as comparison since it’s not a good indication of the underlying business. In terms of income, there was an EU fine last year which impacted the comparison.
It’s all laid out in this table:
The stock is up 2% in reaction to the news.
In the release, Microsoft says its devices and consumer business was up 12% to $US8.30 billion. Its commercial group was up 7% to $US12.23 billion.
Its revenue from Windows OEMs was up 4%, led by a 19% growth in Windows OEM Pro revenue.
It also said, “Office 365 revenue grew over 100%, and commercial seats nearly doubled, demonstrating strong enterprise momentum for Microsoft’s cloud productivity solutions.”
Microsoft said that Surface sales were $US500 million for the quarter. That’s up 50% on a year-over-year basis, but down significantly from the holiday quarter which was $US893 million.
“This quarter’s results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world,” said CEO Satya Nadella in the earnings release. “We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth.”
Here’s a table of each group at Microsoft: