Cloud growth continues as Microsoft reports FY17 Q2 earnings results

Michael Cottuli

Microsoft has released its earnings report for the second quarter of the 2017 fiscal year, and the numbers are looking pretty good. One of the big takeaways from this report is that Microsoft has found its groove when it comes to cloud technology, with revenue from cloud services increasing across the board.

“I am pleased with our results this quarter. We see strong demand for our cloud-based services and are executing well on our long-term growth strategy,” said Amy Hood, executive vice president and chief financial officer at Microsoft.

Revenue in Productivity and Business Processes was $7.4 billion and increased 10% (up 12% in constant currency), with the following business highlights:

  • Office commercial products and cloud services revenue increased 5% (up 7% in constant currency) driven by Office 365 commercial revenue growth of 47% (up 49% in constant currency)
  • Office consumer products and cloud services revenue increased 22% (up 21% in constant currency) and Office 365 consumer subscribers increased to 24.9 million
  • Dynamics products and cloud services revenue increased 7% (up 9% in constant currency) driven by Dynamics 365 revenue growth
  • LinkedIn contributed revenue of $228 million for the period beginning on December 8, 2016

Revenue in Intelligent Cloud was $6.9 billion and increased 8% (up 10% in constant currency), with the following business highlights:

  • Server products and cloud services revenue increased 12% (up 14% in constant currency) driven by double-digit annuity revenue growth
  • Azure revenue increased 93% (up 95% in constant currency) with Azure compute usage more than doubling year-over-year
  • Enterprise Services revenue decreased 4% (down 2% in constant currency) with declines in custom support agreements offset by growth in Premier Support Services and consulting

The Q2 earnings report was full of good news for Microsoft fans, with success in the cloud being one of the major factors. As we move into the third quarter of fiscal year 2017, we’ll be looking to see cloud technology prosper even more.