Reaction: As a result of yesterday’s financial results, Microsoft’s stocks have witnessed a surge. Today they’re up more than 10% and have overtaken Google again to become the second most valuable company after Apple. The market value as of today is $394 billion.
Update: Microsoft sold 1.6 million consoles in the third quarter. The majority of them were Xbox One consoles as Xbox 360 sales continue to decline because consumers prefer the new device.
Microsoft just reported its third quarter financial results and they beat industry expectations by around $640 million. Analysts expected Microsoft to earn $21.06 billion this quarter but the company made $21.7 billion instead. Compared to last year, Microsoft’s revenue grew 6% and they posted an operating income of $6.6 billion.
Surface sales accounted for $713 million in revenue and are up 44% from last year. The company also sold 8.6 million phones generating a total of $1.4 billion. Xbox 360 sales continue to decline but a significant increase in Xbox Live Gold subscriptions and usage boosted the company’s overall profit. The lower price of the Xbox One also impacted console income but the staggering increase in Xbox Live Gold subscription revenue boosted the company overall.
Office 365 had a huge quarter and it grew and astonishing 35% compared to last year. The service now numbers 12.4 million subscribers. The company also revealed that the iOS and Android versions of Office have been downloaded more than 100 million times. This played a major role in the jump in subscribers because many customers who tried out the free applications opted to get an Office 365 subscription.
Apart from that, an increase in Bing’s market share saw that division’s income grow by 21%. Microsoft’s Azure services saw the biggest increase with their revenue totaling to $6.3 billion. The jump is a 106% increase from last year.
While Windows sales continue to decline before the launch of Windows 10 this summer, Microsoft is successfully transitioning to a cloud-based company and those divisions are making the most profit. Increased usage of Microsoft Azure, Office 365, Bing and Xbox Live significantly contributed to this growth. It’s great to see Microsoft beat industry expectations even when they have to factor in the cost of Nokia’s acquisition.
Source: Microsoft Investor Relations
Asher Madan is a games journalist, former News Writer (Gaming) at Windows Central. They contributed 182 articles to ICXM in 2015, focused on Windows and PC, and Xbox news: joined Future plc’s Windows Central in 2017 covering Xbox news, hardware, and reviews.