- After several quarters of providing light guidance, Microsoft (NASDAQ:MSFT) is singing a different tune today: The software giant has guided on its call for its three reporting segments to collectively post FQ2 revenue of $24.8B-$25.4B, in-line with a $25.1B consensus and likely sparking hopes of upside given Microsoft's history of guiding conservatively.
- Productivity & Business Processes is expected to see revenue of $6.6B-$6.7B, Intelligent Cloud $6.2B-$6.3B, and More Personal Computing $12B-$12.4B. Forex is expected to have a 4% impact on revenue growth, after having a 5% impact in FQ1.
- Though revenue fell 7% Y/Y in FQ1 due to PC weakness and cloud transition (pushes out revenue recognition), cloud subscription billings helped the unearned revenue balance (non-GAAP) rise 3% Y/Y (9% exc. forex) to $23.1B. The contracted but not billed balance was above $23.5B.
- Also: Bing, once a large cash sinkhole, is finally profitable. Search-related revenue topped $1B in FQ1, with search ad revenue (ex-TAC) rising 23% Y/Y. Windows 10/Cortana integration appears to be helping: Nearly 20% of the quarter's search revenue came from Windows 10 devices.
- Other details: 1) Office commercial product/services revenue fell 2% Y/Y thanks to the 365 transition. Office consumer revenue fell 13%. 2) Xbox Live monthly active users rose 28% to 39M. 3) Enterprise mobility management (EMM) software customers more than doubled Y/Y to over 20K. 4) Windows volume license revenue fell 3% Y/Y, and Surface revenue fell 26% to $672M ahead of the Surface Pro 4 launch.
- Microsoft is trading at $51.89 after hours.
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FQ1 results, details, earnings slides (.ppt), guidance (.ppt)