Microsoft has released their Q3 fiscal 2015 earnings report, revealing that the Redmond giant collected $21.7 billion in revenue for the quarter, posting net income of $4.98 billion. Although revenue has increased six percent from the same quarter last year, profits have dropped by 12 percent.
Two of Microsoft's divisions did particularly well in Q3: Surface, which posted revenues of $713 million to increase by 44 percent on the same quarter last year; and Lumia, which saw phone sales rise to 8.6 million, an 18 percent increase on last year's Q3 that contributed to $1.4 billion in revenue.
Microsoft also saw strong growth in their commercial cloud business, which grew 106% year-on-year, and in their search advertising business, which grew by 21 percent. Office 365 customers have increased sequentially by 35% to over 12.4 million, and the company's server division also grew by 12 percent.
Unfortunately the news isn't as good for the Windows OEM division, which saw non-Pro revenue decline by 26%, and Pro revenue decline by 19%. While licensing Windows is still one of the biggest businesses for Microsoft, the PC market hasn't been doing too well over the past few quarters, and this is hurting Microsoft's bottom line.
The Xbox division didn't do too well for Microsoft either. The company sold just 1.6 million Xboxes during the quarter, down on 2.0 million in the same quarter last year. This lead to Xbox platform revenues decreasing by 24 percent, despite an increase in Xbox Live usage overall. Up until this point, Sony is clearly winning the current console war, with the PS4 outselling the Xbox One nearly every month.
With the launch of Windows 10 coming up very soon, Microsoft should see revenues and profits start to rise again towards the end of the year. Xbox remains a concern for the company, but strong gains to the Surface and Lumia divisions are promising.