Riding on the success of Cloud, Office and Surface tablets, Microsoft reported revenue of $20.5 billion and net income of $4.7 billion in the first quarter of its 2017 fiscal earnings – news that took its shares to an all-time high on Thursday. While Office commercial products and cloud services revenue grew 5 percent, Office consumer products and cloud services revenue grew 8 percent. Office 365 consumer subscribers have now increased to 24 million. Dynamics products and cloud services revenue grew 11 percent driven by Dynamics online revenue growth while revenue in Intelligent Cloud grew 8 percent to $6.4 billion. Also Read - Windows 11 could be a free upgrade for you provided you fall in this categoryAlso Read - Nintendo Direct E3 2021: Metroid Dread, Mario Party Superstars, a new Legend of Zelda and more
Microsoft Azure Cloud revenue grew 116 percent, with Azure compute usage more than doubling year-over-year, the company said in a statement. “We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences. We continue to innovate, grow engagement, and build our total addressable market,” said Microsoft’s Chief Executive Officer Satya Nadella.
The news led Microsoft shares jump nearly 6 percent, adding over $26 billion to its market value. Surface notebooks (Surface Pro 4 and Surface Book) revenue recorded $926 million in the quarter – up 38 per cent from the $672 million 2015. Server products and cloud services revenue increased 11 percent while Enterprise Services revenue increased one percent. “Our first quarter results showed continued demand for our Cloud-based services,” added Microsoft’s executive vice president and Chief Financial Officer Amy Hood. ALSO READ: Microsoft schedules event for October 26; to announce a new Surface AIO, Redstone 2 update and more
“We continue to invest, position ourselves for long-term growth, and execute well across our businesses,” Hood added. Windows revenue was flat year-over-year, slightly ahead of the PC market, while Windows commercial products and cloud services revenue also remained flat year-over-year. Phone revenue declined a massive 72 percent. Since Microsoft has given up on smartphone hardware, this has not come as a surprise. Gaming revenue went down by 5 percent, driven by lower Xbox console revenue. ALSO READ: Microsoft launches Dynamics 365 cloud service for small and medium businesses
“Search advertising revenue excluding traffic acquisition costs grew 9 percent driven by increased revenue per search and search volume,” Microsoft said. Microsoft recently acquired LinkedIn for $26.2 billion and now plans to incorporate this enterprising social networking platform into the productivity and business segments of its earnings results, media reports said. ALSO READ: Microsoft builds new speech recognition system that is as accurate as humans