Microsoft Reports Strong Cloud Growth, Dismal Windows Phone Sales for Q3

microsoft hero

Microsoft has released their earnings report for the first quarter of the calendar year, third quarter fiscal, with the company reporting $3.8 billion in net income on $20.5 billion in revenue. Both of these figures are lower than the same quarter from a year ago, but the company’s cloud services continue to be a bright spot for the company.

The one figure many Windows Phone users were waiting to see was how well or poorly the devices did this quarter, and the news is not good. Windows Phone revenue decreased $662 million or 47% because Microsoft sold only 2.3 million Lumia phones, whereas they sold 8.6 million units last year.

But it’s not all bad for hardware at the company as Surface revenue was up to $1.1 billion, a jump of 61% from the same time last year, which was pushed strongly by the release of the Surface Pro 4 and the Surface Book.

Sponsored Content

What is “Inside Microsoft Teams”?

“Inside Microsoft Teams” is a webcast series, now in Season 4 for IT pros hosted by Microsoft Product Manager, Stephen Rose. Stephen & his guests comprised of customers, partners, and real-world experts share best practices of planning, deploying, adopting, managing, and securing Teams. You can watch any episode at your convenience, find resources, blogs, reviews of accessories certified for Teams, bonus clips, and information regarding upcoming live broadcasts. Our next episode, “Polaris Inc., and Microsoft Teams- Reinventing how we work and play” will be airing on Oct. 28th from 10-11am PST.

On the PC side of things, OEM revenue was down 2 percent, and while a decline is never a good thing in this segment, it did outperform the PC market as a whole.

Office continued to perform well with Office commercial products and cloud services revenue growing 7%, and Office 365 subscriptions for the consumer grew to 22.2 million subscribers.

Microsoft’s cloud services grew 3% with $.1 billion in revenue with Azure revenue growing 120% and usage of Azure compute and Azure SQL database more than doubling year-over-year.

As expected, the story continues to be that Windows revenue is slowly declining while cloud and Office are growing significantly quarter after quarter. While they are seeing good results from their own hardware in the PC space, the company needs to figure out a strategy to stop the significant cash-drain that Windows Phone has become.

While the company did miss on its earnings expectations from Wall St, if it were not for tax expenses that the company incurred this quarter, they would have beaten the estimates set out for this time period.

Related Topics:


Don't have a login but want to join the conversation? Sign up for a Petri Account

Comments (0)

Leave a Reply

Brad Sams has more than a decade of writing and publishing experience under his belt including helping to establish new and seasoned publications From breaking news about upcoming Microsoft products to telling the story of how a billion dollar brand was birthed in his book, Beneath a Surface, Brad is a well-rounded journalist who has established himself as a trusted name in the industry.
External Sharing and Guest User Access in Microsoft 365 and Teams

This eBook will dive into policy considerations you need to make when creating and managing guest user access to your Teams network, as well as the different layers of guest access and the common challenges that accompany a more complicated Microsoft 365 infrastructure.

You will learn:

  • Who should be allowed to be invited as a guest?
  • What type of guests should be able to access files in SharePoint and OneDrive?
  • How should guests be offboarded?
  • How should you determine who has access to sensitive information in your environment?

Sponsored by: