Analysts predicted $1 billion less than Microsoft’s outcome, the company surging ahead due to a 90% year-over-year revenue increase in Azure revenue. The increase puts the company’s commercial cloud revenue for this quarter at $5 billion. Meanwhile, operating income sat at $7.7 billion, increasing by 15%, and diluted earnings per share increased 17% to $0.84. “This quarter we exceeded $20 billion in commercial cloud ARR, outpacing the goal we set just over two years ago,” said CEO Satya Nadella in a press release. “Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform.”
Office and Surface
As well as cloud, Microsoft saw a large boost in its Office 365 commercial revenue. A 42% increase also propelled growth in commercial products and cloud services revenue, which increased 10%. Importantly, this month also marked a return to growth for Surface, which had been faltering somewhat due to lack of new hardware. The new Surface Laptop propelled a growth of 12% in that area. Gaming revenue remains a struggling point for Microsoft, with an increase of just 1%. Though Xbox software and services revenue saw a growth of 21%, a decrease in hardware revenue almost offset it entirely. Windows, on the other hand, saw a 4% increase, 7% of that going to Pro, but non-pro falling by 1%. Windows commercial also saw a growth of 7%. In all, it’s a solid quarter to Microsoft, with only minor revenue decreases. After hours, its stock price has shot up by 4.86%, to 82.59. “Our strong start to the fiscal year reflects the impact of our continued investment in product innovation and sales capacity to capture expanding market opportunities,” said CFO Amy Hood.
