Microsoft Q1 FY2017 by the numbers: $22.34 billion revenue, $5.98 billion profit


Microsoft has posted its earnings for Q1 FY2017 (Q3 CY2016), revealing revenue of $22.34 billion, operating income of $7.1 billion, net income of $5.98 billion, and earnings per share of $0.76 cents. The software giant beat analyst expectations of $21.71 billion in revenue and EPS of $0.68. The stock is up around 5.5 percent over yesterday, with shares trading at over $60 -- a record value for the company.

How do the latest numbers compare to Q1 FY2016? A year ago Microsoft reported revenue of $21.66 billion, operating income of $7.07 billion, net income of $5.66 billion and EPS of $0.70. So the revenue, operating income, net income, and EPS are up.

Those are all non-GAAP figures. In GAAP terms, the latest numbers come in at $20.45 billion for revenue, $5.22 for operating income, $4.69 for net income and $0.60 EPS. A year prior, Microsoft reported $20.37 billion in revenue, $5.79 billion in operating income, $4.9 billion in net income and $0.61 EPS. Again, those are GAAP figures.

Let's take a closer look at the latest results (the numbers are in GAAP terms, and so are any comparisons with previous quarters too).

Microsoft reports $6.7 billion of revenue from Productivity and Business Processes (up six percent year-over-year), $6.4 billion from Intelligent Cloud (up eight percent year-over-year), $9.3 billion from More Personal Computing (down two percent year-over-year), and negative $1.9 billion from Corporate and Other (down 47 percent year-over-year).

In Productivity and Business Processes, revenue from Office commercial products and cloud services is up five percent, Office 365 commercial revenue is up 51 percent, Office consumer products and cloud services revenue is up eight percent, and Dynamics products and services revenue is up 11 percent. Also, the number of Office 365 users in the consumer space is up to 24 million, while in terms of commercial seats Microsoft reports a 40 percent growth year over year.

In Intelligent Cloud, revenue from Server products and cloud services is up 11 percent, Azure revenue is up 116 percent, and Enterprise Services revenue is up one percent. Azure compute usage has more than doubled year-over-year. The number of Enterprise Mobility customers is up 85 percent to over 37,000, while the installed base is up nearly 2.5 times.

In More Personal Computing, Microsoft reports that Windows OEM revenue is flat on a year-over-year basis, and so is the revenue from Windows commercial products and cloud services. However, revenue from phones is down by a massive 72 percent. Gaming revenue is also down, but only by five percent. Search advertising revenue, not taking into account traffic acquisition costs, is up nine percent.

Worth mentioning is the Surface revenue, which Microsoft reports at $926 million for the quarter. The figure is higher year-over-year (from $672 million), thanks to Surface Pro 4 and Surface Book.

Microsoft has provided an update on the LinkedIn acquisition, saying that it expects it to close in Q2 FY2017. That would be before the end of 2016. After the acquisition is closed, Microsoft expects to report the social network's results under Productivity and Business Processes, and the impact of operations and the integration and transaction expenses will be reported separately in the coming quarter's financial results.

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