Microsoft Corporation (NASDAQ:MSFT) posted its biggest ever quarterly loss of $3.2 billion, mostly hurt by the $7.5 billion writedown of its flopped Nokia purchase.

As previously announced, in Q4 Microsoft took a non-cash impairment charge of $7.5 billion related to its acquisition of Nokia’s mobile phone business.

As Microsoft continues overhauling its delivery model and prepares for the release of Windows 10, CEO Satya Nadella said he’s optimistic about the year ahead as his company focuses “on areas of differentiation and significant opportunity in large addressable markets”. On the consumer side, Windows OEM revenue fell 22 percent.

Next week marks the official launch of Windows 10, the next major update to Microsoft’s operating system.

The upcoming release of Windows 10 will create new opportunities for Microsoft and our ecosystem, said he.

Sales of Windows to businesses fell 21 percent from the year-earlier quarter, when demand for the operating system had surged after Microsoft discontinued support for Windows XP.

Microsoft’s commercial cloud products appear to be in rude health, and the firm reported that Azure, Office 365 and Dynamics CRN Online drove cloud revenue up by 88 percent. Microsoft’s Office 365 business was also booming this year, up 3 per cent as the company introduced an additional 15 million users to the productivity suite.

Microsoft announced the expected write-down earlier this month, adding that it would also cut as many as 7,800 jobs. Including those costs, the net loss in the fourth quarter was 40 USA cents a share, the Redmond, Washington-based company said.

LOS ANGELES (AP) — Microsoft booked an $8.4 billion charge in the fourth quarter, swallowing a bitter pill by writing off the Nokia phone business it bought just over a year ago. Excluding the write-down, restructuring charges and other items, per-share earnings were 62 cents.

Commercial revenue increased slightly (up four per cent in constant currency) to $13.5 billion.

The company’s Devices and Consumer revenues dropped by 13-percent, and the PC market is partly to blame. The Surface division saw revenue grow by 117% on the back of strong Surface Pro 3 and Surface 3 sales. The strong growth in consoles, Xbox Live transactions and first party games brought 27% growth in Xbox revenue as well. Search advertising revenue was up 23 percent, and Microsoft said it expects Bing to be profitable in the next fiscal year. Also up were its server products and services, and Dynamics revenue.