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Satya Nadella... Cloud and Proud?

23 Jul 2014

Strong cloud growth topped Microsoft's quarterly earnings report this morning, as the tech giant continues its evolution under new CEO Satya Nadella.

Announcing revenue of US$23.38 billion for the quarter ended June 30, 2014, Redmond revealed gross margin, operating income, and diluted earnings per share (“EPS”) for the quarter were $15.79 billion, $6.48 billion, and $0.55 per share, respectively.

“We are galvanised around our core as a productivity and platform company for the mobile-first and cloud-first world, and we are driving growth with disciplined decisions, bold innovation, and focused execution,” Nadella says.

“I’m proud that our aggressive move to the cloud is paying off – our commercial cloud revenue doubled again this year to a $4.4 billion annual run rate.”

Microsoft also completed the acquisition of substantially all of the Nokia Devices and Services business on April 25, 2014 and for the fourth quarter and fiscal year 2014, the results of NDS contributed revenue, gross margin, operating income, and diluted EPS of $1.99 billion, $54 million, $(692) million, and $(0.08), respectively.

“Our solid execution and expense discipline allowed us to deliver a strong finish to the fiscal year,” adds Amy Hood, executive vice president and CFO, Microsoft.

“As we enter fiscal 2015, we are focused on aligning our resources to strategic investments that we believe will deliver the next wave of innovation, growth, and long-term shareholder value.”

Devices and Consumer revenue grew 42% to $10.00 billion, with the following business highlights:

* Windows OEM revenue grew 3%, driven by 11% growth in Windows OEM Pro revenue.

* Office 365 Home and Personal subscribers totaled more than 5.6 million, adding more than 1 million subscribers again this quarter.

* The acquired Phone Hardware business contributed $1.99 billion to current year revenue.

* Bing search advertising revenue grew 40%, and U.S. search share grew to 19.2%.

Meanwhile, commercial revenue grew 11% to $13.48 billion, with the following business highlights:

* Commercial cloud revenue grew 147% with an annualized run rate that exceeds $4.4 billion.

* Windows volume licensing revenue grew 11%.

* Server products revenue, including Azure, grew 16%, with double-digit growth for SQL Server and System Center.

“Our results reflect our customers’ long-term commitments to our products and services, and strong execution by our field teams," adds Kevin Turner, COO, Microsoft.

“Looking forward, we are excited by the amazing opportunities enabled by our technology roadmap and our strong engagement across partners, customers, and developers.”

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