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Microsoft Beats Wall Street Expectations in Q2 FY17 Report Thanks to Strong Cloud Business

A growth in cloud revenue puts Microsoft's total at $26.1 billion, higher than Wall Steet analyst expectations of $25.3. Office revenue also propelled this change, though this was offset somewhat by a fall in gaming and phone revenue.


has published it Q2 FY17 financial report, and things are looking positive on the whole. The Redmond giant reported revenue of $26.1 billion and shares earnings per share of $0.83 (non-GAAP).

This beats the expectations of Wall Street, which put the company at around $25.3 billion revenue and earnings per share of $0.79.

The result is thanks, in part, to continued growth in the cloud sector. Revenue in Intelligent Cloud was $6.9 billion, up 8%, and 10% in constant currency. Azure growth was a particular strength, up 93% year-on-year, with compute usage doubling. The only noticeable fall was in Enterprise Services, where revenue fell by 4%.

There was also growth in revenue in the Productivity and Business Processes section, which includes Microsoft's Office suite. Total revenue was $7.4 billion, marking an increase of 10%. LinkedIn contributed $228 million to that total from December.

Office commercial products and cloud services helped too, with a 5% growth in revenue. That's thanks mostly to commercial revenue, which grew by 47%.

The statistics for consumer office are looking good too. Revenue increased by 22%, while the total number of subscribers is up to 24.9 million.

Fall in Gaming Revenue and Personal Computing

It's rare that Microsoft reports growth across the board and today is no different. There were some areas that suffered this quarter, one of them being personal computing.

In total, revenue for personal computing fell by 5%, totally $11.8 billion. However, this is somewhat expected. Microsoft's failing phone business netted a huge 81% decline.

Thankfully, this was offset somewhat by a growth of 5% in Windows OEM revenue and 5% in commercial products and cloud services revenue.

Unfortunately, that growth didn't extend to Microsoft's gaming revenue. It decreased a total of 3%, though Microsoft notes that lower console revenue was largely offset by growth in Xbox software and services (18%).

Another positive was the growth in active Xbox Live users. The number of monthly active players grew by 15% year-over-year and reached 55 million.

Search revenue also increased when you factor out traffic acquisition costs. A growth of 11% came from increased search volume and revenue per search.

In all, it's been a good quarter for Microsoft, despite the slightly concerning fall in gaming. No doubt shareholders will be happy, and Microsoft is currently at an all-time high.

Ryan Maskell
Ryan Maskellhttps://ryanmaskell.co.uk
Ryan has had a passion for gaming and technology since early childhood. Fusing the skills from his Creative Writing and Publishing degree with profound technical knowledge, he enjoys covering news about Microsoft. As an avid writer, he is also working on his debut novel.

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