It was earnings day on Wall Street on Tuesday, as Apple and Microsoft both reported earnings to analysts and stockholders. Microsoft hit the ground running as the market closed, and posted 4th quarter results that will please many investors and proves Satya Nadella’s new path as CEO.
The 4th quarter results from Microsoft were the end of its fiscal year, ending on June 30, 2014. It included the Nokia acquisition which finally closed during the quarter, and also pointed to Microsoft’s new strategy to the cloud, and the enterprise, which made huge gains.
4th Quarter Microsoft Results
Microsoft announced $23.38 billion in revenues for the 4th Quarter of 2014 for the company. It had gross margins of $15.79 billion, operating income of $6.48 billion, and diluted earnings per share at $0.55 per share. This included the Nokia Devices and Services acquisition earlier in the quarter.
The biggest gains for the quarter were from the commercial cloud revenue, as Microsoft saw it double to $4.4 billion annual run rate. They are looking to strategic investments that will drive innovation, growth, and long-term shareholder value. It was a 18% year over year growth mark and 22% non-gaap related growth for the company.
Consumer and Commercial Revenue Highlights
Windows OEM revenue according to its press release grew 3%, being driven by an 11% growth in the Windows OEM pro revenue. Office 365 Home and Personal subscribers grew to 5.6 million, and gained 1 million subscribers in the quarter. The new phone hardware contributed almost $2 billion in revenue, and Bing saw search advertising revenue grow 40%, with Bing growing to 19% overall in the US.
Commercially, Microsoft saw the commercial cloud revenue grow 147% with an annualized run rate at over $4.4 billion. It saw Windows volume licensing revenue grow over 11%. Microsoft’s big enterprise products saw huge growths too. It saw Azure product revenue grow 16%, and saw double digit growth for SQL server and system center products. It did however take a $38 million Surface RT inventory adjustment charge for Surface Mini products, which never made it to product.
Microsoft had a great quarter and its earnings showed it. Wall Street loves these numbers, and investors do as well.