Microsoft's (MSFT) Commercial Licensing revenue (Office, enterprise Windows, and Server & Tools licenses) rose 7% Y/Y in FQ2 (even with FQ1), and accounted for 44% of revenue and 62% of gross profit.
Commercial Other revenue, meanwhile, jumped 28% Y/Y for the second straight quarter, thanks to continued triple-digit growth for commercial cloud (Azure, enterprise Office 365) revenue. But the segment's gross margin (23%) is well below that of Commercial Licensing (93%).
Microsoft asserts it "significantly outpaced enterprise IT spend" by taking share.
Professional Windows OEM license revenue rose 12% Y/Y thanks to strong corporate Win. 7 upgrade activity. That, in turn, resulted in total Windows OEM revenue falling only 3% (vs. -7% in FQ1 and -15% in FQ4) in spite of ongoing consumer weakness.
Devices & Consumer Licensing (Windows OEM, consumer Office, Windows Phone, Android royalties) revenue fell 6% Y/Y. D&C hardware, boosted by the Xbox One launch, grew 68% Y/Y. Microsoft says it sold 3.9M Xbox One units into retail channels, and that Surface revenue rose over 2x Q/Q to $893M. D&C Other (Xbox Live, consumer Office 365, Windows Store) revenue fell 10%.
Opex rose 3% Y/Y, less than revenue growth of 14%. $2.1B was spent on buybacks.
MSFT +3.9% AH. CC at 5:30PM ET, guidance will be provided.