Microsoft today reported earnings for its third fiscal quarter of 2017, including revenue of $23.6 billion, net income of $5.7 billion, and earnings per share of $0.73. The company’s Intelligent Cloud and Productivity and Business Processes operating groups countered the decline from its More Personal Computing unit.

In Q3 2016, Microsoft saw $22.1 billion in revenue, net income of $5.0 billion, and earnings per share of $0.62. For Q3 2017, analysts had expected Microsoft to earn $23.6 billion in revenue and earnings per share of $0.70. In short, the company surpassed results for last year’s quarter, met analyst expectations for revenue, and outperformed estimates for earnings per share.

The company’s stock was up 0.65 percent in regular trading, but was down about 1 percent in after-hours trading (likely because revenue was not beaten and because Surface seriously suffered). Microsoft also said it returned $4.6 billion to shareholders in the form of share repurchases and dividends during the quarter.

“Our results this quarter reflect the trust customers are placing in the Microsoft Cloud,” Microsoft CEO Satya Nadella said in a statement. “From large multi-nationals to small and medium businesses to non-profits all over the world, organizations are using Microsoft’s cloud platforms to power their digital transformation.”

More Personal Computing

This segment, which includes results for Windows licensing and devices (Surface, phones, and Xbox), declined 7 percent to $8.8 billion.

Windows OEM revenue increased 5 percent. Breaking that down further, Pro revenue was up 10 percent and non-Pro revenue was down 1 percent, though both outperformed the overall market.

Surface revenue decreased 26 percent, from $1.11 billion in Q3 2016 to $831 million in Q3 2017. The Surface Pro 4 and the Surface Book aren’t cutting it anymore. The Surface Book i7 wasn’t enough to move the needle — buyers want a Pro 5 and a Book 2.

Phone revenue declined by $730 million. Microsoft is not calling out a percentage anymore because the company wants to de-emphasize the division.

Advertising revenue from search, excluding traffic acquisition costs, grew 8 percent. Microsoft has previously attributed this to Windows 10, which includes tighter Bing integration.

Gaming revenue grew 4 percent, thanks to Xbox Live. This is surprising given that many gamers are waiting for Project Scorpio.

Intelligent Cloud

This segment, which includes results from server products and services (including Windows Server and Azure), grew 11 percent to $6.8 billion.

Server products and cloud services revenue grew 15 percent. But the big highlight as always was Azure revenue, which grew 93 percent. Azure compute did not double year over year as in past quarters.

Two quarters ago, Microsoft’s commercial cloud business exceeded a $10.0 billion annual run rate. This quarter, the company shared it now sits at $15.2 billion. The projection for this number is still $20 billion by 2018.

Productivity and Business Processes

This segment, which includes results from Office and Office 365 (commercial and consumer customers), grew 22 percent to $8.0 billion.

After three quarters in a row of adding fewer than 1 million subscribers, Office 365 has managed to overcome the trend. In Q3, 1.3 million subscribers were added to hit 26.2 million. Office commercial products and cloud services revenue grew 7 percent, with Office 365 revenue up 45 percent. The company’s subscription revenue stream continues to deliver, much like it did when Office was a traditional software business.

Microsoft also broke out LinkedIn, which it acquired for $26.2 billion last year. The social network contributed $975 million in revenue (which is not bad, given expectations were around $950 million).

This was a solid quarter for Microsoft, but investors clearly want to see more from the company’s devices. 2017 will see a lot of focus on new Surface and Xbox products, while Azure and Office continue to keep the company plowing ahead.