Microsoft Releases Q1 FY16 Earnings Report; Says Bing Is Profitable

Microsoft reported its financial performance for the first quarter of the 2016 fiscal year, which ended on September 30, 2015.

The results as listed in a press release:

• Revenue was $20.4 billion GAAP, and $21.7 billion non-GAAP
• Operating income was $5.8 billion GAAP, and $7.1 billion non-GAAP
• Net income was $4.6 billion GAAP, and $5.4 billion non-GAAP
• Earnings per share was $0.57 GAAP, and $0.67 non-GAAP

Moreover, revenue in productivity and business processes declined 3%, revenue in intelligent cloud grew 8% (with Azure revenue and compute usage more than doubled year-over-year) and revenue in more personal computing declined 17% (with phone revenue declining 54% in constant currency).

"We are making strong progress across each of our three ambitions by delivering innovation people love," said Satya Nadella, chief executive officer at Microsoft. “Customer excitement for new devices, Windows 10, Office 365 and Azure is increasing as we bring together the best Microsoft experiences to empower people to achieve more."

Analysts attributed the company’s recent performance to the ‘strong showing’ from the Windows business, as the company was able to revive the numbers after reporting its worst net loss three months ago, Financial Times reported.

Amy Hood, executive vice president and chief financial officer of Microsoft, said that Bing, its search unit launched in 2009, had hit an “important milestone” as it reached profitability for the first time, on revenues that surged 29 percent to over $1bn.

“We expect Bing’s strong trajectory to continue, remaining profitable for the remainder of the year,” she added.

Around 20 percent of Microsoft's search revenue in September, according to officials, was driven by Windows 10 devices, Zdnet reported. By increasingly integrating Cortana, Microsoft's personal digital assistant which is powered by Bing, directly into various Windows 10 devices, Microsoft is boosting the volume of Bing searches.