Microsoft’s earnings report for the second quarter of fiscal 2018 are out and, much to analyst surprise, the company exceeded expectations by quite a bit: analysts previously projected Microsoft revenue at $23.56 billion. Actual revenues clocked at $24.5 billion, resulting in 12% YoY growth.
Microsoft’s earnings are looking good
Windows OEM revenue is one of the contributors to these figures, having registered 4% growth year-over-year. Revenue from personal computing has remained almost unchanged but Microsoft clocked 12% growth in laptops. The growth was primarily driven by the new Surface Laptop.
The primary force driving the revenue growth was once again Microsoft’s cloud business, with $6.9 billion which translates into a 14% YoY growth. Alongside this grown is Microsoft’s revenue from Office commercial products and cloud services, soaring high with 10% YoY growth.
This is what Satya Nadella, CEO of Microsoft, had to say about the earning reports:
This quarter we exceeded $20 billion in commercial cloud ARR, outpacing the goal we set just over two years ago.[…]
Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform.
Its worth mentioning that the recently acquired LinkedIn contributed to a decent $1.1 billion revenue while gaming revenue also increased by 1%, with Xbox software and services revenue registeringh a growth of 21%. However, this was offset by lower hardware revenue. Making up for it is an increase of 15% in search advertising revenue.
Microsoft has continuously invested in product innovation and recently scaled up its sales capacity in order to address new market opportunities.
Let us have a look at highlights of this earnings report:
- Increase in revenue by 12%
- Net income has increased by 16%
- Operating income has increased by 15%
- Diluted earnings per share stand at $0.84 which is a 17% increase.