In the first earnings report since Satya Nadella took the helm as CEO, Microsoft today announced revenue of $20.4 billion for third fiscal quarter of 2014, beating analysts’ estimate of $20.38 billion. Earnings per share came in at $0.68 per share, also beating estimates, which had pegged per share earnings at $.063.

Revenue was essentially flat from the previous year and net income fell 6.6 percent to $5.66 billion.

“This quarter’s results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world. We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth,” said Satya Nadella, chief executive officer at Microsoft in the earnings press release. “We are focused on executing rapidly and delivering bold, innovative products that people love to use.”

Continued Growth In Search Advertising

The Devices and Consumer division, which includes Bing, had $8.30 billion in revenue, a gain of 12 percent. Search advertising grew a robust 38 percent from the previous year. Up from last quarter’s 34 percent gain in year-over-year earnings from search advertising.

In March, Microsoft sites held 18.6 percent of the US search market according to comScore, an uptick of 0.2 percent, which came from a decline in Yahoo search.

Gains In Areas of both Consumer and Commercial Divisions

Revenue from Surface sales hit roughly $500 million, an increase of over 50 percent. Xbox sales fell from 7.4 million last quarter (which included the holidays) to just 2 million units this quarter.

In the Commercial division, Office 365 revenue grew over 100 percent with commercial seats nearly doubling. Azure revenue increased by over 150 percent.

Microsoft executives, including Nadella, will host an earnings call and webcast at 2:30 p.m. PDT (5:30 p.m. EDT) today.