14 DAY TRIAL // Microsoft is becoming a more profitable business under Satya Nadella’s umbrella, and the latest financial report confirms that cloud and Office have become the top cash cows for the software giant.
Microsoft reported total revenue of $23.3 billion for the latest quarter and net income of no less than $21.2 billion of the full 2017 fiscal year that ended on June 31. Quarterly revenues were up 13 percent year-over-year (YOY), with the company returning $4.6 billion to shareholders.
Strong cloud and Office performance
CEO Satya Nadella is the one who switched the focus at Microsoft to cloud services, and it looks like this was the winning card, as revenue in the Intelligent Cloud division increased no less than 11 percent to reach $7.4 billion. Server products and cloud services alone generate 15 percent increased revenue, with Azure revenue posting a growth of no more, no less than 97 percent.
The More Personal Computing unit, however, declined 2 percent to $8.8 billion, and this was mostly caused by the Surface unit, which continued going down because of the lack of new products. The new models, namely the Surface Pro and the Surface Laptop, launched towards the end of the fiscal year, so they arrived too late to make a difference. Surface revenue thus declined 2 percent.
Windows OEM revenue increased 1 percent, and Microsoft says this is just slightly ahead of the overall PC market, while Windows commercial products and cloud services revenue increased 8 percent.
If you’re looking for phones, Microsoft has provided only little details about this division, saying that “phone revenue was immaterial and declined $361 million.”
“We delivered a strong finish to the year with 30% growth in commercial bookings this quarter,” said Amy Hood, executive vice president and chief financial officer at Microsoft. “We will continue to invest in key areas that drive future growth for Microsoft and our customers.”
The next quarter should bring even increased revenue for Microsoft given that the company has refreshed the Surface lineup, which is mostly the only one that dragged it down in Q4 FY 2017, with the Surface Pro and the Surface Laptop already showing the first signs of success.