Microsoft's Q1 2017 earnings: Surface, Cloud and Office continue to shine as Phone disappoints

Microsoft has just released its earnings report for the first fiscal year of 2017. Microsoft reported a revenue of $20.5 billion and $22.3 billion non-GAP. The company topped analysts’ expectations once again, and they are doing pretty good overall.

Firstly, the company’s Surface revenue increased by 38% YoY thanks to the Surface Book and the Surface Pro 4. Surface generated $672 million in revenue in Q1 2016, but it generated $926 million this fiscal year which is very good. Microsoft is, of course, expected to introduce a new Surface device next week — so the Surface business will continue to grow in the next fiscal year.

Unsurprisingly enough, Microsoft’s Phone business continues to fall with a decline of 72% in the revenue this fiscal year. Additionally, Xbox isn’t doing very well either despite the launch of the new Xbox One S — according to Microsoft, its Gaming business’ revenue saw a decline of 5%. Moreover, Xbox Live now has 47 million active users — which is down from 49 million from Q4 2016, but it’s up from 39 million YoY.

Microsoft’s cloud business continues to shine — the company’s Intelligent Cloud business saw an increase in the revenue by 8%, with Azure revenue growing by an impressive 116% and server products and cloud services growing by 11%. Other products such as Office also saw a growth in revenue by 5%, and revenue from Office 365 also increased by 51%. And lastly, Microsoft’s Search and Bing advertising revenue also grew by 9%, probably fueled by Windows 10’s growth. However, Windows OEM revenue was flat year-over-year.

You can find the full report here.