During Q2 fiscal 2016, Microsoft made $6.3 billion in net income on $25.7 billion in revenue. In short, the strong sales of cloud, server and Surface PC products offset the weaker demand for phone and the Windows OS. Microsoft announced the following results for the quarter ended December 31, 2015:

• Revenue was $23.8 billion GAAP, and $25.7 billion non-GAAP
• Operating income was $6.0 billion GAAP, and $7.9 billion non-GAAP
• Net income was $5.0 billion GAAP, and $6.3 billion non-GAAP
• Earnings per share was $0.62 GAAP, and $0.78 non-GAAP

During the quarter, Microsoft returned $6.5 billion to shareholders in the form of share repurchases and dividends.

"Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas," said Satya Nadella, chief executive officer at Microsoft. "Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices."

Office commercial products and cloud services revenue grew 5% in constant currency driven by Office 365 revenue growth of nearly 70% in constant currency. Microsoft said that its Office 365 consumer subscribers increased to 20.6 million. In addition, Dynamics revenue grew 11% in constant currency with Dynamics CRM Online seat added more than doubling year-over-year for the fifth consecutive quarter.

Server products and cloud services revenue grew 10%, while Microsoft's Azure revenue grew 140% in constant currency with revenue from Azure premium services growing nearly 3x year-over-year.

Microsoft plans to promote the Windows 10 OS more aggressively. In coming weeks, PC owners who have set their machines to automatically install important updates could find the new operating system already downloaded and ready for activation.

On the other hand, Windows OEM revenue declined 5% in constant currency. Surface revenue increased 29% in constant currency driven by the launch of Surface Pro 4 and Surface Book.

Microsoft revenue from phones declined 49%.

Search advertising revenue excluding traffic acquisition costs grew 21% in constant currency with continued benefit from Windows 10 usage

Last but not least, Xbox Live monthly active users grew 30% year-over-year to a record 48 million.