Microsoft Beats The Street, 25 Percent Revenue Increase, Surface Leading The Charge

Microsoft has seen strong performance across its commercial and consumer segments in its last quarter. According to the company’s fiscal Q1 FY15 earnings report, it was revealed that Microsoft’s revenue was $23.2 billion for the quarter that ended on September 30, 2014.

The company had a 25 percent increase in revenue sales, due in part to its acquisition of Nokia’s mobile phone business. For the three months that ended on September 30, Microsoft’s net income was $4.54 billion, down when compared to $5.24 billion from a year ago, while revenue was $23.2 billion, up from $18.53 billion.

Overall, the quarter’s net income could have been higher except for the $1.14 billion Microsoft spent on integration and restructuring expenses. This was mostly due to the massive round of layoffs at Nokia and the integration of the business into Microsoft.

“We are innovating faster, engaging more deeply across the industry, and putting our customers at the center of everything we do, all of which positions Microsoft for future growth,” said Microsoft CEO Satya Nadella. “Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organization.”

Contributing factors for Microsoft’s growth was largely due to its devices and consumer division which saw a 47 percent growth in revenue to $10.96 billion dollars. According to the report, Office 365 Home and Personal subscription numbers were over 7 million, phone hardware revenue exceeded $2.6 billion (due to the Nokia acquisition), total Xbox console sales were at 2.4 million units with the Xbox One launching in 28 new markets, and the Surface Pro 3 has gained momentum bringing $908 million in revenue.

The information about the Surface Pro 3 is certainly good news for Microsoft, which had been seeing a loss from its Surface line of about $1.7 billion over the last two years. The success of the Surface Pro 3 could be attributed with Microsoft’s more aggressive marketing by launching it in 28 markets and putting out new ads.

Meanwhile, commercial revenue grew by 10 percent to $12.28 billion with Microsoft seeing a 128 percent increase in its commercial cloud revenue which was driven by Office 365, Azure, and Dynamics CRM. Revenue for server products and services increased 13 percent, Office commercial products and services revenue grew by 5 percent due to customers transitioning over to Office 365, and Windows volume licensing revenue increasing by 10 percent.