Revenue falls short including at the company’s closely watched cloud business
Microsoft reported quarterly sales and profit that fell short of analysts’ projections, held back by the stronger dollar and weaker demand for cloud-computing services, personal-computer software and advertising on its online properties.
“Post-Memorial Day, things started getting slower and you started hearing more cautious buying behaviour and longer sales cycles,” Wood said. Those headwinds may impact the company’s forecast even more than the results from the recent quarter, he said, and currency exchange rates have worsened since Microsoft cut projections in June.
Excluding the impact of currency, Azure growth was 1% lower than forecast in April, CFO Amy Hood said in an interview. Still, the company signed a record number of Azure contracts worth more than $100m and $1bn, she said. Microsoft also recorded $113m in severance payments in the recent period. Earlier in July, Microsoft said it cut less than 1% of its 180,000-person workforce, affecting groups such as consulting and customer solutions, but said it planned to finish the current fiscal year with increased headcount. The company has also eliminated many open jobs and slowed hiring including in units that make Azure, Windows, Office and security software.
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