Microsoft Cloud strength highlights fourth quarter results


REDMOND, Wash. — July 19, 2016 — Microsoft Corp. today announced the following results for the quarter ended June 30, 2016:

Revenue was $20.6 billion GAAP, and $22.6 billion non-GAAP
Operating income was $3.1 billion GAAP, and $6.2 billion non-GAAP
Net income was $3.1 billion GAAP, and $5.5 billion non-GAAP
Diluted earnings per share was $0.39 GAAP, and $0.69 non-GAAP

“This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations,” said Satya Nadella, chief executive officer at Microsoft. “The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.”

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. Additional information regarding non-GAAP definitions is provided below. All growth comparisons relate to the corresponding period in the last fiscal year.

Three Months Ended June 30,

($ in millions, except per share amounts)
Revenue
Operating Income (Loss)
Net Income (Loss)
Diluted Earnings (Loss) per Share
2015 As Reported (GAAP)
$22,180
$(2,053)
$(3,195)
$(0.40)
Impairment, Integration, and Restructuring Expenses

8,438
8,262
1.02
2015 As Adjusted (non-GAAP)
$22,180
$6,385
$5,067
$0.62
2016 As Reported (GAAP)
$20,614
$3,080
$3,122
$0.39
Net Impact from Windows 10 Revenue Deferrals
2,028
2,028
1,467
0.19
Impairment, Integration, and Restructuring Expenses

1,110
895
0.11
2016 As Adjusted (non-GAAP)
$22,642
$6,218
$5,484
$0.69
Percentage Change Y/Y (GAAP)
(7)%
*
*
*
Percentage Change Y/Y (non-GAAP)
2%
(3)%
8%
11%
Percentage Change Y/Y (non-GAAP) Constant Currency
5%
6%
23%
27%
* Not meaningful

During the quarter, Microsoft returned $6.4 billion to shareholders in the form of share repurchases and dividends.

The current quarter effective tax rate reflected a favorable mix of our income between the U.S. and foreign countries, as well as benefits associated with distributions from foreign affiliates. As such, the GAAP and non-GAAP tax rates were 7% and 15%, respectively.

“This fiscal year we invested in innovation and expanded our market presence in key product areas and geographies,” said Amy Hood, executive vice president and chief financial officer at Microsoft. “I am pleased with the execution from our sales teams and partners this quarter who delivered a strong finish to the fiscal year.”

Revenue in Productivity and Business Processes grew 5% (up 8% in constant currency) to $7.0 billion, with the following business highlights:

Office commercial products and cloud services revenue grew 5% (up 9% in constant currency) driven by Office 365 commercial revenue growth of 54% (up 59% in constant currency)
Office consumer products and cloud services revenue grew 19% (up 18% in constant currency) with Office 365 consumer subscribers increasing to 23.1 million
Dynamics products and cloud services revenue grew 6% (up 7% in constant currency) with Dynamics CRM Online paid seats growing more than 2.5x year-over-year

Revenue in Intelligent Cloud grew 7% (up 10% in constant currency) to $6.7 billion, with the following business highlights:

Server products and cloud services revenue increased 5% (up 8% in constant currency) driven by double-digit annuity revenue growth
Azure revenue grew 102% (up 108% in constant currency) with Azure compute usage more than doubling year-over-year
Enterprise Mobility customers nearly doubled year-over-year to over 33,000, and the installed base grew nearly 2.5x year-over-year

Revenue in More Personal Computing declined 4% …read more