Microsoft Q3 2017 Earnings: Microsoft killing it in the Cloud as Azure revenue increase 93% YoY

Microsoft sees itself increasingly as a Cloud company, and with good reason, as it’s one of its best performing areas.

In today’s FY Q3 2017 results Microsoft reported their Intelligent Cloud was up 11% at $6.8 billion driven by Azure revenue growth of 93%.

“Strong execution and demand for our cloud-based services drove our commercial cloud annualised revenue run rate to more than $15.2 billion,” said Amy Hood, executive vice president and chief financial officer at Microsoft.

The good news is that the growth was not just driven by discounting Microsoft’s cloud services, with Microsoft reporting an actual growth in their Intelligent cloud margins by 6%, driven by improved Azure margins.

“Our results this quarter reflect the trust customers are placing in the Microsoft Cloud,” said Satya Nadella, chief executive officer at Microsoft. “From large multi-nationals to small and medium businesses to non-profits all over the world, organisations are using Microsoft’s cloud platforms to power their digital transformation.”

Besides Azure Microsoft also saw growth in their other cloud-based ambitions.

  • Office commercial products and cloud services revenue increased 7% (up 8% in constant currency) driven by Office 365 commercial revenue growth of 45% (up 45% in constant currency)
  • Office consumer products and cloud services revenue increased 15% (up 14% in constant currency) and Office 365 consumer subscribers increased to 26.2 million
  • Dynamics products and cloud services revenue increased 10% (up 11% in constant currency) driven by Dynamics 365 revenue growth of 81% (up 82% in constant currency)

The company reported a total revenue of $22.1 billion GAAP, which is down from $25.7 billion YoY.

You can find the full report here. 

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