Today, Microsoft released its quarterly earnings report. This report is for the first quarter of its 2018 fiscal year, or the third quarter of the 2017 calendar year. As usual, things like Surface, Office 365, cloud services like Azure, and Windows all saw growth.
The company reported a total of $24.538 billion in revenue, which is a 12% (11% in constant currency) increase from last year, which was $21.928B. This can be broken down to $8.238B in Processes, $6.922B in Intelligent Cloud, and $9.378B in Personal Computing, seeing growth of 28% (28% in CC), 14% (13% in CC), and 0% (-1% in CC), respectively.
Operating income was $7.7 billion, a 15% (15% in CC) increase year-over-year, and new income is $6.6 billion, a 16% (16% in CC) increase. Operating expenses were $8.6 billion, an increase of 16% (15% in CC) over last year.
As you can see from the image above, the biggest areas of growth, in terms of percentage, are Azure, Dynamics 365, and Office 365 commercial. As usual, cloud services continue to be among the fastest growing parts of Microsoft's business.
In Productivity and Business Processes, the 28% revenue increase (28% in constant currency) was driven by LinkedIn and Office 365. Office commercial products and cloud services grew by 10% (10% in CC), including an increase for Office 365 commercial by 42% (42% in CC), and a 17% (17% in CC) decline in Office commercial products.
Office consumer products and cloud services revenue increased by 12% (10% in CC), and there are now 28 million consumer Office 365 subscribers. To Productivity and Business Processes, LinkedIn contributed $1.1 billion.
In the More Personal Computing category, operating expenses declined by 1% (down 2% in constant currency), due to lower gaming marketing and phone expenses. Operating income, on the other hand, grew by 26% (26% in CC).
Windows OEM revenue grew by 4% total, and that included a 7% increase in Pro, but a 1% decrease in non-Pro. Windows commercial products grew by 7%, or 6% in constant currency.
Surface revenue finally saw some growth, as it had been declining for a while due to the lack of new hardware. The 12% increase (11% in CC) can be attributed to sales of the Surface Laptop. As you can imagine, phone revenue was once again referred to as "immaterial", and declined by $315 million.
Gaming revenue increased by 1% (0% in CC), because strength in Xbox software and services - which grew by 21% (20% in CC) offset hardware sales. Xbox Live monthly active users saw a 13% growth, to 53 million.
Finally, Intelligent Cloud revenue grew by 14% (13% in CC), and while operating expenses increased by 3% (2% in CC), operating income grew by 20% (20% in CC).
Server products and cloud services grew by 17% (17% in CC), and that mostly includes the 90% (89% in CC) increase in Azure revenue. The rest is a 2% (2% in CC) increase in server revenue. The company also said that Azure premium services grew by "triple digits" for the 13th consecutive quarter.
If you're interested in Microsoft's earnings and want to find out more, tune into the company's earnings call at 2:30pm PT.