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Microsoft’s Windows 10 operating system now has 400 million monthly active users worldwide (mobile, PC, etc), since launch of Windows 10 in July 2015, the company said during its Q1FY17  financial results. CEO Satya Nadella added that increased adoption is driving developers, search and Cortana engagement as well.

The company also mentioned its various new initiatives with Windows 10, “this quarter we announced that we are open source Windows power shall, our industry-leading infrastructure management tool and made it available on Linux.” It also released the Windows 10 anniversary update with “advanced security features including Windows defender, threat protection, our cloud enabled service that helps enterprise detect, investigate and respond to advance networking tax,” said CEO Nadella on the concall.

Some highlights from the concall:

On search business and Cortona:

Cortana has become more popular with its adoption on desktop devices with Windows 10. According to Nadella, “more than 1000 application of been developed using the Cortana API and Windows 10 Cortana search box now has 141 million monthly active users with almost 13,000,000,000 questions asked to date.” The company did not provide any specific information on Bing.

On Microsoft Office:

Office Commercial revenue increased $264 million or 5%, driven by higher revenue from Office 365 commercial, mainly due to growth in subscribers. Office Consumer revenue also increased by $58 million or 8%. Nadella said that the monthly active users for Office 365 commercial are now over 85 million, a 40% growth year-on-year. The service is also doing well on mobile, adding 45 million monthly active devices on Android and iOS. Nadella mentions that, “We recently introduced cloud power intelligence within Word, Excel, PowerPoint and outlook that uses machine learning and advanced natural language processing to help automate related content and connections focus your inbox and more easily create compelling content.”

On Azure cloud platform:

Microsoft mentions that over 60% of Fortune 500 companies now use at least three of its cloud offerings. Nadella said that, “our commercial cloud annualized revenue run rate now exceeds $13 billion, and we remain on track to achieve our goal of $20 million in fiscal year 2018. And as with last quarter, we continue to grow our commercial annuity mix which is now at 88%.” The company recently expanded its data centers which now total 38 regions including France, UK and Germany.

On gaming business:

Gaming revenue declined 5% driven by lower Xbox console revenue offset by higher Xbox software and services revenue. Microsoft mentions that its Xbox live database grew across platformy by 21% year-on-year. According to Nadella, “we have more than 20 billion hours of gameplay on Windows 10 PCs and tablets, more than 500% increase year-over-year.

On Hololens, the company said that it had made the development edition available to all developers and business customers in the US and Canada as well as expanded its presence to six new markets. Nadella said that “enterprise customers like Volvo, Japan Airlines and the PGA tour, all embracing Microsoft Hololens to transform the way they work and create new mixed reality experiences for customers.”

Financials:

– Microsoft reported overall GAAP revenues of $20.4 billion during Q1FY17, which is marginally up from $20.3 billion in the same quarter last year (Q1FY16).

– Revenue increased $74 million, driven by growth in Intelligent Cloud and Productivity and Business Processes, offset in part by an increase in the net revenue deferral from Windows 10 and lower revenue from more personal computing.

– Azure revenue grew 116% with Azure compute usage more than doubling year-over-year.

– Operating income decreased $568 million or 10%, primarily due to lower gross margin and an increase in research and development expenses, offset in part by lower sales and marketing expenses.

Download: Press Release | Transcript