April 25, 2014

Surface and Office 365 High Points in Microsoft's Q3 Report


Microsoft gets a lot of flak for various reasons, but whether or not you’re a fan of the company, it’s hard to deny the fact that it knows how to turn a profit. In fact, the world is reminded of this at the end of every quarter when Microsoft posts earnings in the billions. This is, of course, the case once more as Microsoft has released Q3 financial figures for fiscal year 2014.

In particular, the software giant managed revenue of $20.4 billion for the quarter ended March 31, 2014, with net income of $5.66 billion. In other words, the third quarter was business as usual for Microsoft — or so it appears at first glance.

Digging deeper, it’s clear that Q3 2014 was a little different from the quarters that came before it. For example, Office 365 Home saw major growth during the period, as the service added one million new subscribers in just three months, bringing the total number to 4.4 million. Considering the fact that an Office 365 subscription is required for mobile Office access on iPhone, iPad and Android, however, that level of growth isn’t too surprising.

What is surprising is the fact that Surface revenue reached $500 million during the period — a year over year increase of 50 percent. Indeed, going into 2013, most thought the Surface would ultimately prove a major flop. Some analysts even cut their Surface RT sales forecasts in half. Then again, Microsoft didn’t break down its Surface revenue by model, so maybe the Surface Pro is still doing all the heavy lifting.

“This quarter’s results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world. We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth,” said Microsoft’s new chief executive office, Satya Nadella, in a statement. “We are focused on executing rapidly and delivering bold, innovative products that people love to use.”




Edited by Stefania Viscusi



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