FY16 Q1 - More Personal Computing Performance- Investor Relations – Microsoft

Browse Prior Earnings Releases:

Earnings Release FY16 Q1

NarrativePower BI

More Personal Computing

More Personal Computing revenue decreased $1.9 billion or 17%, mainly due to lower revenue from Devices and Windows, offset in part by higher search advertising revenue. More Personal Computing revenue included an unfavorable foreign currency impact of approximately 4%.

• Devices revenue decreased $1.8 billion or 49%, mainly due to lower revenue from phones, driven by the shift in strategy for the phone business, as well as lower Surface revenue. Phones revenue decreased $1.5 billion or 58%, as we sold 5.8 million Lumia phones and 25.5 million other non-Lumia phones in the first quarter of fiscal year 2016, compared with 9.3 million and 42.9 million sold, respectively, in the prior year. Surface revenue decreased $236 million or 26%, primarily driven by the release of Surface Pro 3 in June 2014.

• Windows revenue decreased $322 million or 7%, mainly due to lower revenue from Windows OEM and patent licensing. Windows OEM revenue decreased $189 million or 6%, driven by declines in the business and consumer PC markets. Windows OEM Pro revenue declined 7%, slightly ahead of the performance of the business PC market. Windows OEM non-Pro revenue declined 4%, outperforming the consumer PC market, driven by a higher mix of premium licenses sold. Patent licensing revenue decreased, due to a decline in units and patent revenue per license, driven by a reduction in the average selling price of smartphones.

• Search advertising revenue, excluding traffic acquisition costs, increased $127 million or 23%, primarily driven by growth in Bing, due to higher revenue per search and search volume.

• Gaming revenue increased slightly, as growth in revenue from Xbox Live and video games was offset in part by lower Xbox hardware revenue. Xbox Live revenue increased 17%, driven by both higher volumes of transactions and revenue per transaction. Video games revenue grew 66%, driven by sales of Minecraft. We acquired Mojang AB, the Swedish video game developer of the Minecraft gaming franchise, in November 2014. Xbox hardware revenue decreased 17%, mainly due to lower volumes of Xbox 360 consoles sold.

More Personal Computing operating income decreased slightly, primarily due to lower gross margin, offset in part by lower operating expenses.

• Gross margin decreased $564 million or 10%, reflecting lower revenue, primarily as a result of lower phones sales, offset in part by a reduction in cost of revenue. Gross margin included an unfavorable foreign currency impact of approximately 6%. Cost of revenue decreased $1.3 billion or 22%, driven by lower Devices cost of revenue.

• Operating expenses decreased $507 million or 13%, mainly due to lower sales and marketing expenses and lower research and development expenses. Sales and marketing expenses decreased $308 million or 18%, driven by a decline in phones advertising and marketing program costs. Research and development expenses decreased $158 million or 9%, mainly due to lower headcount-related expenses, as well as capitalization of certain software development costs.

IMPORTANT NOTICE TO USERS (summary only, click here  for full text of notice); All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information. All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our  Forms 10-Q and 10-K.

Download Earnings Related Files

Information contained in these documents is current as of the earnings date, and not restated for new accounting standards

FY16 Earnings Release Schedule

  • Q2-Thursday, January 28
  • Q3-Thursday, April 21
  • Q4-Tuesday, July 19

Microsoft Corp (MSFT)

stock details table
Volume
Market Cap
52 Week High
52 Week Low