HomeWinBuzzer NewsMicrosoft FY17 Q3 Report: $20.5 Billion Revenue, 11% Growth in Cloud, 26%...

Microsoft FY17 Q3 Report: $20.5 Billion Revenue, 11% Growth in Cloud, 26% Fall in Surface Revenue

Microsoft's FY17 Q3 report shows an Azure growth of 93%, while Windows OEM revenue is up 5%. Unfortunately, it was marred by poor results in personal computing, likely due to the lack of a Surface refresh.


's FY17 Q3 report is out and though it may not be as impressive as some wanted, it still signals positive growth. In total, revenue was $22.1 billion GAAP. That's nothing incredible, but still an increase of $50 million year-on-year.

Net income told another positive tale, at $4.8 billion versus 3.8, and operating income fell by $300 million year-on-year.

Cloud Growth

Despite the disappointment from investors, Microsoft had a very positive quarter for cloud. The intelligent cloud division saw a rise of 11%, accounting for about 20% of revenues. That was powered, in part, by significant Azure growth, which was a huge 93%.

There was also an increase in revenue for server products and cloud services, up 15%. Though Enterprise services revenue fell by 1%, it was offset by a growth in Premier Support services and computing.

“Our results this quarter reflect the trust customers are placing in the Microsoft Cloud,” said CEO . “From large multi-nationals to small and medium businesses to non-profits all over the world, organizations are using Microsoft's cloud platforms to power their digital transformation.”

Fall in Surface Sales

Unfortunately, it wasn't all positive news. Much of that investor disappointment came from a 7% fall in revenue for Microsoft's personal computing division.

Windows OEM revenue saw a revenue increase of 5%, and commercial products and cloud services 6. However, this was more than offset by a drop of 26% in Surface revenue.

This echoes the need for a refresh in the line, which hasn't seen a significant update for some time. Microsoft has been price cutting on top of that, leading to further declines.

However, that could all change come next quarter, depending on what the company does at its spring event early next month. The Surface Pro 5 will allegedly have a Kaby Lake processor, and a release then could spur new purchases.

It's also worth noting that gaming revenue grew by 4% this quarter, despite new details about Project Scorpio. Of course, that includes metrics other than console sales, but it's still looking good.

Finally, Productivity and Business Process revenue managed to net a 22% increase. Office 365 experienced a revenue growth of 45%, with consumer subscriptions now at 26.2 million. LinkedIn also contributed to this category for the first time, with a sum of $975 million.

In all, it's a mixed bag for Microsoft. Though it's a solid quarter, it seems investors wanted some more positive results from devices. With Scorpio around the corner and possible Surface releases, they should get their wish soon.

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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