Microsoft today reported earnings for its fourth fiscal quarter of 2016, including revenue of $22.6 billion and earnings per share of $0.69. In Q4 2015, Microsoft saw $22.2 billion in revenue and a loss of $0.40 per share due to the $7.6 billion writedown related to its acquisition of the Nokia Devices and Services business.

Analysts had expected Microsoft to earn $22.14 billion in revenue and earnings per share of $0.58. In short, the company beat expectations. The company’s stock was down 1.61 percent in regular trading, but up some 3 percent in after-hours trading (expected, given the results). Microsoft said it returned $6.4 billion to shareholders in the form of share repurchases and dividends during the quarter.

“This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations,” Microsoft CEO Satya Nadella said in a statement. “The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead.”

Microsoft now reports its earnings results in three operating groups. Here is the breakdown.

Productivity and Business Processes

This segment, which includes results from Office and Office 365 (commercial and consumer customers), grew 5 percent to $7.0 billion.

Office 365 had a very slow quarter, adding just 0.9 million subscribers to hit 23.1 million. Office commercial products and cloud services revenue grew 5 percent, with Office 365 revenue up 54 percent.

Steady Office 365 growth is not much of a surprise, but we can now definitely see it has been slowing over the last few quarters. The company has converted its traditionally most lucrative software business into a subscription revenue stream, and we’re now entering the plateau.

Intelligent Cloud

This segment, which includes results from server products and services (including Windows Server and Azure), grew 7 percent to $6.7 billion.

Server products and cloud services revenue grew 5 percent. But the big highlight as always was Azure revenue, which grew 102 percent, and usage of Azure compute, which more than doubled year over year.

Last quarter, Microsoft’s commercial cloud business exceeded a $10.0 billion annual run rate. The company is still projecting this number to hit $20 billion by 2018.

More Personal Computing

This segment, which includes results for Windows licensing and devices (Surface, phones, and Xbox), declined 4 percent to $8.9 billion.

Windows OEM Pro revenue increased 2 percent, while non-Pro revenue jumped 27 percent. Surface revenue increased 9 percent, from $888 million in Q4 2015 to $965 million in Q4 2016. The Surface Pro 4 and the Surface Book seem to be selling well. And yet we still don’t know how many Microsoft is pushing out, as the number includes accessories and older Surface devices.

Phone revenue declined 71 percent. Microsoft didn’t talk units, but it did say the decline was $870 million and that it hurt overall devices revenue, which decreased by 35 percent (down $782 million). None of this is shocking given the employee cuts and Nadella’s plan to focus on fewer devices.

Advertising revenue from search, excluding traffic acquisition costs, grew 16 percent. As always, Microsoft attributed this to Windows 10, which includes tighter Bing integration.

Xbox Live monthly active users grew 33 percent year over year. The service now has 49 million players, setting a new record, but sales declined 9 percent.

All in all, a strong quarter for Microsoft. But the trouble spots still remain: The company will be feeling the pain of its phone business long after the revenue losses are taken care of.