Microsoft Corporation (NASDAQ:MSFT) Q2 2015 Earnings Conference Call - Final Transcript

Jan 26, 2015 • 05:30 pm ET

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Microsoft Corporation (NASDAQ:MSFT) Q2 2015 Earnings Conference Call - Final Transcript

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Presentation
Executive
Satya Nadella

spans devices from small screens to large screens, to no screens at all. It's a world where interacting with technologies as natural as interacting with other people and it's a world that demands trust and security.

It is also a world with rich opportunity for developers and Windows 10 will be the most attractive windows development platform ever, with our free upgrade offer and with universal

Executive
Satya Nadella

application and unified store for developers, we'll have a large unified up to date user base to target. We want people to love Windows and have made this our most collaborative project yet with more than two million insiders giving us feedback every day. I am very optimistic about Windows 10.

We're making progress with our own devices, for those in the market today and also the ones that we've recently announced. This quarter we surpassed the $1 billion revenue mark with surface for the first time. The value proposition of being the most productive tablet is resonating. Further the sales for Lumia phones top 10 million units growing 30% year-over-year this quarter with strength in devices such as Lumia 500 and Lumia 600 series, our affordable smartphones. In this segment of the market, the combination of our brand and value standout and we plan to continue to build a beachhead here.

We're also creating new device types that open up new markets and opportunities for Microsoft. In October we launched our first wearable, the Microsoft band and just last week we revealed two new hardware with Windows 10; Microsoft Surface Hub and Microsoft HoloLens. Microsoft Surface Hub will revolutionize group collaboration and meetings, HoloLens and Windows holographic computing will make mix reality applications part of everyday life across work and home.

I want to talk briefly about Xbox. Xbox One console adoption accelerated this holiday and was the top-selling console in the U.S. and fans on Xbox Live were engaged with the service more than ever before. However, it's our strategies coming together with Windows 10 that give me the greatest optimism. The vibrant social gaming community on Xbox Live will span Xbox, Windows PC, Tablets and phones. With Windows 10 gamers on a PC, tablet or Xbox console can play together and games on Xbox One can easily stream through a Window 10 PC or tablet.

It's also getting clear how games people love today will evolve to mind-blowing experiences in the future when designed for mixed reality that Windows 10 and HoloLens create. Just imagine what's possible with Minecraft. Gaming truly is a valuable part of millions of people's lives and Microsoft will excel and increase our lead.

Before closing, I wanted to share a few thoughts on capital allocation. Over the past several quarters and certainly with last week's Windows 10 announcements you've seen us unleash new innovation in our cloud services with Windows and our hardware.

Executive
Satya Nadella

We did all of this without materially growing our cost base. This required clarity and purpose and value proposition, realignment of talent and