Microsoft beats expectations with $26.1bn revenue courtesy Office and Cloud services

CIOL Writers
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Beating analysts' expectations, Microsoft reported $26.1 billion revenue in the second quarter of the fiscal year 2017. Net income was $6.5 billion.


The stellar performance was basically led by Office and cloud segments, which the company is betting on to boost future growth.

Microsoft's cloud business raked in $6.86 billion in revenue during the quarter. That figure came in both above analyst expectations and the company's own guidance. The company added that revenue from its major cloud offering, Azure, grew 93 percent year over year.

The other star performer was Office 365 whose commercial revenue rose 47 percent, and Office 365 consumer subscribers climbed to 24.9 million, up by about 1 million subscribers over the past three months.


“Our customers are seeing greater value and opportunity as we partner with them through their digital transformation,” said Satya Nadella, chief executive officer at Microsoft. “Accelerating advancements in AI across our platforms and services will provide further opportunity to drive growth in the Microsoft Cloud.”

As this was the first earnings report for Microsoft since the company completed its acquisition of LinkedIn on Dec. 8 and LinkedIn’s results are technically included in the earnings. For the quarter, Microsoft reported that LinkedIn contributed $228 million in revenue.

In terms of different business divisions, Productivity and Business Processes (PBP), which includes Office, consumer Office, Dynamics and now LinkedIn, saw revenue increase 10 percent to $7.4 billion. More Personal Computing (MPC) segment, that includes Windows, Devices, Gaming and Search, saw a revenue decline of 5 percent to $11.8 billion.

Lastly, Intelligent Cloud (IC), which includes Azure, server, cloud services and enterprise services, saw an 8 percent revenue increase to $6.9 billion. Azure revenue increased 93 percent with Azure compute usage more than doubling year-over-year

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