Microsoft cites (what else?) strong cloud growth in Q4 earnings

Satya Nadella, Microsoft CEO

Microsoft just posted its fourth quarter results — its first since it completed the $7.17 billion acquisition of Nokia in late April. And, the numbers come out just a a week after Microsoft announced its largest-ever layoffs: 18,000 employees, or 14 percent of its post-Nokia workforce.

The pre-tax cost of that layoff is expected to range from  $1.1 billion and $1.6 billion for FY 2015 — and will likely show up mostly in the first half of that year, Microsoft said in a statement.

On the earnings call, CEO Satya Nadella said the company would focus on core cloud OS and device experience going forward. He also touched on the layoffs/reorg when he said that Outlook and Exchange are now one team; OneDrive and OneDrive for Business are one team and Skype and Lync are one team.

And to that, one can only say “Amen.” It wasn’t unusual in the past for a person working on one product not to have a clue the specifics of another, closely related product.And one can hope that if this happens, OneDrive and OneDrive for Business might actually morph into the same code base

Later in the call Nadella also said Microsoft will converge multiple Windows code bases into one — over time. Microsoft, he acknowledged has dealt with multiple versions of Windows — for phones, for tablets, for Xbox, for embedded devices. “Now, one team with a layered architecture will enable us to have a collective opportunity … that lets us scale the UI across all screens and [build] universal apps,” he said in response to a question.

The company also called out cloud growth saying “commercial cloud revenue” was up 147 percent to a $4.4 billion run rate. But, as always, what constitutes cloud can be, um nebulous. Clearly, the Microsoft Azure public cloud infrastructure, which Microsoft has taken great pains to make hospitable to third party (non-Windows) tools and applications — is front and center.

The company wants to push Microsoft productivity tools to all manner of devices, including those running Android and iOS operating systems. Azure acts as a foundation for all that. And in that productivity arena, the company said it added another 1 million Office 365 Home and Personal versions, raising the total to 5.6 million users.

Microsoft also said its brand new phone hardware business, where the lion’s share of layoffs came, contributed $1.99 billion to this year’s revenue.

And here are the bare bones:
MSFt screenshot

And here are some operational items that impacted the company’s financial performance:

MSFT earnings screen

And here’s how this quarter lines up historically in terms of net income and revenue:

This post was updated several times during the company’s earnings call.

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