Microsoft reports $23.6 billion in revenue for Q3 2017: Azure and Office lead while Surface and Phone drop

Microsoft has just reported its earnings for Q3 2017 (fiscal year). The company reported a revenue of $23.6 billion (non-GAAP). Microsoft was expected to report $23.62 billion in revenue by the Wall Street, so Redmond slightly missed out on analysts’ expectations.

Microsoft’s continued growth is of course led by its cloud and productivity businesses. Revenue in Productivity and Business Processes increased by 22%, with Office commercial products and cloud services’ revenue increasing by 7%. Office consumer products and services’ revenue rose by a whopping 15%, while Dynamics and cloud services saw an increase of 10%. More interestingly, Microsoft’s $26.2 billion acquisition of LinkedIn brought in $975 million in revenue which is, to be frank, not so impressive.

As for Azure and Microsoft’s other cloud businesses, the revenue was $6.8 billion, up by 11% YoY. Microsoft’s Personal Computing business isn’t doing so well, as it experienced a fall of 7% in revenue. Even though there was a 5% rise in Windows OEM revenue, Microsoft Surface’s revenue fell by 26% which was likely caused by lack of major upgrades to the product line. Surface Studio was really the only big product launch for Microsoft Surface recently, but that’s only targetted towards a niche market.

Revenue from Microsoft’s phone business declined by $730 million, and that’s not really surprising. Gaming, on the other hand, saw a rise of 4% YoY with Xbox Live monthly active users rising by 13%. Revenue from Xbox software and services also saw an increase of 7% which is substantial for Microsoft.

Overall, it’s been a pretty good quarter for Microsoft. Surface will likely come back strong once Microsoft reveals new hardware later this year but with Office and Azure roaring, there’s not a lot Microsoft needs to be worried about at the moment — except its phone business, of course.

You can find the full report here.

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