Microsoft’s growth continues to be driven by Office and cloud services

Microsoft has reported a revenue of $23.3 billion for its most recent fiscal quarter, a 13 percent year-over-year increase, for a total net income of $21.2 billion in its 2017 fiscal year, which ended in June. LinkedIn contributed $1.1 billion to revenue during Q4, $125,000 more than it did in Q3, the first quarter LinkedIn showed up in Microsoft’s reports. Gaming revenue went up by 3 percent as Xbox sales remained strong post-E3.

Q4 was another strong quarter for cloud services, as it has historically been over the past year. Revenue in this category was up by 15 percent year over year, driven by Azure’s growth of 97 percent. One particularly big win for Microsoft is from its Office segment, which is now seeing more revenue from subscriptions than from its traditional licensing model. While Office revenue is only up 5 percent overall, the milestone shows Microsoft successfully transitioning to a new, and likely more lucrative, business model.

However, Microsoft Surface revenue dropped 2 percent, and the company attributes it to “product lifecycle transitions.” The new Surface Laptop and Surface Pro, which were announced on May 2nd and May 25th, respectively, have been only been available since June 15th, meaning the late arrivals did little to penetrate Surface sales this quarter.

“We delivered a strong finish to the year with 30 percent growth in commercial bookings this quarter,” said Amy Hood, executive vice president and chief financial officer at Microsoft in a press release.