Microsoft Reports $20 Billion in Revenue for Q3 of FY2016
Microsoft Corp. today announced the latest results results for the quarter ended March 31, 2016, with over 20 Billion in Revenue created.
Revenue was $20.5 billion GAAP, and $22.1 billion non-GAAP
- Operating income was $5.3 billion GAAP, and $6.8 billion non-GAAP
- Net income was $3.8 billion GAAP, and $5.0 billion non-GAAP
- Earnings per share was $0.47 GAAP, and $0.62 non-GAAP
“Organizations using digital technology to transform and drive new growth increasingly choose Microsoft as a partner,” said Satya Nadella, chief executive officer at Microsoft. “As these organizations turn to us, we’re seeing momentum across Microsoft’s cloud services and with Windows 10.”
The following table reconciles our financial results reported in accordance with generally accepted accounting principles (“GAAP”) to non-GAAP financial results. Microsoft has provided this non-GAAP financial information to aid investors in better understanding the company’s performance. All growth comparisons relate to the corresponding period in the last fiscal year.
Three Months Ended March 31, |
||||
($ in millions, except per share amounts) |
Revenue |
Operating Income |
Net Income |
Earnings per Share |
2015 As Reported (GAAP) |
$21,729 |
$6,594 |
$4,985 |
$0.61 |
Integration and Restructuring Charges |
- |
190 |
119 |
0.01 |
2015 As Adjusted (non-GAAP) |
$21,729 |
$6,784 |
$5,104 |
$0.62 |
2016 As Reported (GAAP) |
$20,531 |
$5,283 |
$3,756 |
$0.47 |
Net Impact from Revenue Deferrals |
1,545 |
1,545 |
1,217 |
0.15 |
2016 As Adjusted (non-GAAP) |
$22,076 |
$6,828 |
$4,973 |
$0.62 |
Percentage Change Y/Y (GAAP) |
(6)% |
(20)% |
(25)% |
(23)% |
Percentage Change Y/Y (non-GAAP) |
2% |
1% |
(3)% |
0% |
Percentage Change Y/Y (non-GAAP) Constant Currency |
5% |
10% |
6% |
10% |
During the quarter, Microsoft returned $6.4 billion to shareholders in the form of share repurchases and dividends.
This quarter’s income tax expense included a catch-up adjustment to account for an expected increase in the full year effective tax rate primarily due to the changing mix of revenue across geographies, as well as between cloud services and software licensing. As such, the GAAP and non-GAAP tax rates were 25% and 24%, respectively.
“Our continued operational and financial discipline drove solid results this quarter,” said Amy Hood, executive vice president and chief financial officer at Microsoft. “We remain focused on investing in our strategic priorities to drive long-term growth."
Revenue in Productivity and Business Processes grew 1% (up 6% in constant currency) to $6.5 billion, with the following business highlights:
- Office commercial products and cloud services revenue grew 7% in constant currency driven by Office 365 revenue growth of 63% in constant currency
- Office consumer products and cloud services revenue grew 6% in constant currency with Office 365 consumer subscribers increasing to 22.2 million
- Dynamics products and cloud services revenue grew 9% in constant currency with Dynamics CRM Online seat adds more than doubling year-over-year
Revenue in Intelligent Cloud grew 3% (up 8% in constant currency) to $6.1 billion, with the following business highlights:
- Server products and cloud services revenue increased 5% in constant currency driven by double-digit annuity revenue growth
- Azure revenue grew 120% in constant currency with usage of Azure compute and Azure SQL database more than doubling year-over-year
- Enterprise Mobility customers more than doubled year-over-year to over 27,000, and the installed base grew nearly 4x year-over-year
Revenue in More Personal Computing grew 1% (up 3% in constant currency) to $9.5 billion, with the following business highlights:
- Windows OEM revenue declined 2% in constant currency, outperforming the PC market, driven by higher consumer premium device mix
- Surface revenue increased 61% in constant currency driven by Surface Pro 4 and Surface Book
- Phone revenue declined 46% in constant currency
- Xbox Live monthly active users grew 26% year-over-year to 46 million
- Search advertising revenue excluding traffic acquisition costs grew 18% in constant currency with continued benefit from Windows 10 usage
“Digital transformation is the number one priority on our customers’ agenda. Companies from large established businesses to emerging start-ups are turning to our cloud solutions to help them move faster and generate new revenue,” said Kevin Turner, chief operating officer at Microsoft.
Microsoft presents constant currency information to provide a non-GAAP framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period non-GAAP results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. The non-GAAP financial measures presented below should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP. All growth comparisons relate to the corresponding period in the last fiscal year.
Financial Performance Constant Currency Reconciliation
Three Months Ended March 31, |
||||
($ in millions, except per share amounts) |
Revenue |
Operating Income |
Net Income |
Earnings per Share |
2015 As Reported (GAAP) |
$21,729 |
$6,594 |
$4,985 |
$0.61 |
2015 As Adjusted (non-GAAP) |
$21,729 |
$6,784 |
$5,104 |
$0.62 |
2016 As Reported (GAAP) |
$20,531 |
$5,283 |
$3,756 |
$0.47 |
2016 As Adjusted (non-GAAP) |
$22,076 |
$6,828 |
$4,973 |
$0.62 |
Percentage Change Y/Y (GAAP) |
(6)% |
(20)% |
(25)% |
(23)% |
Percentage Change Y/Y (non-GAAP) |
2% |
1% |
(3)% |
0% |
Constant Currency Impact |
$(838) |
$(656) |
$(443) |
$(0.06) |
Percentage Change Y/Y (non-GAAP) Constant Currency |
5% |
10% |
6% |
10% |
Segment Revenue Constant Currency Reconciliation
Three Months Ended March 31, |
|||
($ in millions) |
Productivity and Business Processes |
Intelligent Cloud |
More Personal Computing |
2015 As Reported (GAAP) |
$6,457 |
$5,903 |
$9,369 |
2016 As Reported (GAAP) |
$6,522 |
$6,096 |
$9,458 |
Percentage Change Y/Y (GAAP) |
1% |
3% |
1% |
Constant Currency Impact |
$(339) |
$(282) |
$(217) |
Percentage Change Y/Y (GAAP) Constant Currency |
6% |
8% |
3% |
DirectX 12 Adoption Big for Developers Microsoft shares New Info - 03/23/2016 09:47 AM
Over at GDC (Game Developers Conference) Microsoft talked about the latest advancements in DirectX 12 technology. Principal Development Lead Max McMullen and Program Manager Chas Boyd shared quite a ...
Microsoft Announces Cross-Network Play Support - 03/15/2016 08:24 AM
Microsoft has announced native support cross-platform play between Xbox One and Windows 10. In case you're wondering, this basically means that players on Xbox One and Windows 10 - using Xbox Live - ...
Microsoft will not support older Windows versions on upcoming PC Hardware - 01/18/2016 11:40 AM
Yes, you need to read that line twice, let me rewrite it. Microsoft will force Windows 10 on all new PC hardware. The company has changed hardware requirements for supporting older versions of Window...
Microsoft places severe limits on unlimited OneDrive Storage - 11/04/2015 10:22 AM
Yesterday the news broke that Microsoft will be drastically change the way they deal with OneDrive subscriptions. Users of Office 365 will no longer have unlimited storage and users with a free acco...
Microsoft May Give Windows 10 Mobile Payments - 10/21/2015 09:07 AM
Microsoft is weighing what to do with the mobile wallet app that's part of the Windows 10 Mobile platform. The operating system already has a basic wallet app (since Windows Phone 8) for storing cred...
Senior Member
Posts: 2576
Joined: 2010-05-26
Or to help humanity give AMD a hand with a philanthropist type hand out.
This would allow AMD to build new tech and catch up a bit to Intel and the result i believe would be beneficial to everyone, since the future is meant to have a clever chip in everything including us.
Senior Member
Posts: 8104
Joined: 2014-09-27
Or to help humanity give AMD a hand with a philanthropist type hand out.
This would allow AMD to build new tech and catch up a bit to Intel and the result i believe would be beneficial to everyone, since the future is meant to have a clever chip in everything including us.
There's no helping humanity. If they bought AMD they would be basically behind every console of their competitors. Something like Samsung with Apple. Deadly enemies until Apple needs Samsung fabs and screens :p
Senior Member
Posts: 6640
Joined: 2010-08-27
Samsung don't mind, they are only gaining by such an arrangement. The majority of people buy iPhones because they're iPhones and they have a new number or letter attached. People buy Samsung because they're not iPhones, this isn't likely to change any time soon. Samsung are not losing any sales therefore by providing Apple with quality parts, they are however making a profit.
Microsoft probably couldn't buy AMD because of antitrust issues, although in the US these issues would probably miraculously disappear if the alternative was for AMD to be sold to a foreign entity. There's also the licencing and access to intellectual property, seeing as AMD needs x86 intellectual property from Intel, and Intel need AMD64 intellectual property from AMD. If a foreign sale occurs, Intel may not be allowed to share their intellectual property, which would just mean Intel will lose AMD64... that's everything 64-bit related!
Microsoft could however, invest in AMD, although I'm not sure at what percentage of ownership where antitrust starts to become an issue. It could end up being that Microsoft and Samsung could each purchase a third with a third remaining as AMD, or something along those lines. However even in such a situation, Microsoft wouldn't be allowed access to knowledge pertaining to CPU's for future PS4 or Nintendo consoles, so that's a grey area. It may be the case that it is compartmentalised.
Senior Member
Posts: 1779
Joined: 2014-08-15
Or to help humanity give AMD a hand with a philanthropist type hand out.
Like 1 bilion $/year?Not a chance,they have too many mouths to feed.mean investors,trade jackals,gov and so on.
Senior Member
Posts: 8104
Joined: 2014-09-27
Sometimes I honestly wonder why Microsoft isn't buying AMD.