That’s a 16% revenue increase year over year, with a net income increase of 35% to $7.4 billion. Once more, Microsoft’s cloud offerings still the show, its Office 365 commercial revenue growth up 42% and intelligent cloud up 17% to $7.9 billion. However, the report also held some surprises. Surface revenue increased by a massive 32%, though last year was hampered by the lack of new hardware. Despite the Xbox One’s exclusive problem, revenue increased by 18%, driven by “third-party title strength”. Windows OEM Revenue increased by a more meager 4%, but Windows commercial products and cloud services are up 17%. Overall, it puts personal computing revenue at $9.9 billion and a 13% increase after years of stagnation and an overall decline in the PC market.
Surpassing Expectations
The stats should help assuage speculation that Microsoft is planning to axe its Surface line and let Windows take a back seat to its cloud business. The revenue from these, as well as its Bing search engine, remains significant. On the other hand, comments from the company’s executives were all about the cloud. “Our results this quarter reflect the trust people and organizations are placing in the Microsoft Cloud. We are innovating across key growth categories of infrastructure, AI, productivity, and business applications to deliver differentiated value to customers,” said CEO Satya Nadella. CFO Amy Hood highlighted strong performance across all sectors, growth in commercial cloud revenue, and “better than expected performance“. It seems LinkedIn is even beginning to pay off its $26 billion acquisition. The professional network reported a revenue increase of 37%, while a session growth increase of 30% revealed increased engagement. Its revenue sat at $1.3 billion for the quarter, following the general trend of surpassed expectations.
