New Surface hardware will likely arrive soon according to comments made by Microsoft executives during the company’s fiscal third quarter results conference call on Thursday. Microsoft said its Surface business grew 32 percent year over year, and the company expects that number to grow even higher in its fiscal fourth quarter and into fiscal 2019 starting July 1 due to an updated Surface hardware portfolio.
“We expect Surface revenue growth in the high teens as we continue to transition to the latest products in our portfolio,” said Amy Hood, executive vice president and chief financial officer at Microsoft. She added that the company also saw better than expected performance from its latest Surface Book.
Microsoft experienced tremendous growth across the board in its fiscal third quarter, with its Azure-branded cloud platform leading the pack with a 93 percent year-over-year growth. Following behind Azure is Dynamics 365 with a 65-percent growth, Office 365 commercial with a 42 percent growth, and LinkedIn with a 37 percent growth. Microsoft’s entire gaming division grew 18 percent year-over-year while its Xbox software and services alone grew 24 percent.
“Our results this quarter reflect the trust people and organizations are placing in the Microsoft Cloud,” Nadella said in a press release. “We are innovating across key growth categories of infrastructure, AI, productivity, and business applications to deliver differentiated value to customers.”
According to Microsoft, LinkedIn sessions grew 30 percent in the third fiscal quarter, leading to a 37 percent increase in revenue compared to the same quarter in fiscal 2017. Meanwhile, subscriptions to Office 365 in the mainstream market reached 30.6 million, a 12 percent increase in revenue. Office 365 in the commercial sector jumped 42 percent, which helped the overall commercial products and cloud services revenue to increase 14 percent year-over-year.
The hint about new Surface hardware in the next several months should come as no surprise. Microsoft’s BUILD developer conference begins May 7, 2018 and could serve as a launch platform for new Surface devices. Microsoft is due to refresh its Surface Studio, Surface Laptop, Surface Book, and Surface Pro hardware. There’s also some kind of a Surface Notepad or Surface Phone supposedly in the works as well.
Other interesting tidbits pulled from the conference call include an increase in Windows OEM revenue of four percent, and an increase in search revenue of 16 percent. It’s Enterprise Services revenue jumped eight percent while its server products and cloud services increased 20 percent. Overall, its Intelligent Cloud revenue hit $7.9 billion, up 17 percent.
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