Blog Post

Nadella to analysts: I’ll be back (on the earnings call)

The first bit of news out of Microsoft CEO Satya Nadella’s earnings call debut is that he expects to keep participating in these conferences as part of an “on-going dialogue with investors.”

This is something Wall Street probably wanted to hear — former CEO Steve Ballmer was not an analysts’ darling, and not a fixture at these events. Nadella was named CEO in February after a very public five-month search.

In preliminary remarks, Nadella said cloud revenue more than doubled, and the Bing search business was also up to 18.6 percent market share. And, as expected, he reiterated his cloud-first, mobile-first mantra. pledging to provide “cloud services for all device platforms — a cloud for everyone and on all devices, while also moving Windows forward.”

This is a tricky path — Windows and traditional Office still pay the bills — but all the growth is seen as coming from cloud and SaaS applications like the Office 365 applications.

CFO Amy Hood said that Office 365 is now on a $2.5 billion run rate with growth fueled both by new customers and increased use by existing customers. the “new customers” part of that statement is important. I would expect that most users were already Microsoft shops — if there are indeed net new users coming to Office 365 that would be a very good sign for Microsoft.

In all, the company reported earnings of $6.97 billion, or 68 cents a share, on revenue of $20.4 billion, roughly flat with a year ago.

This story was updated several times as more information became available.

Satya Nadella, Microsoft CEO
Satya Nadella, Microsoft CEO