Subscriptions for Office 365 productivity software also lured both businesses and consumers, and even Windows sales came in better than the overall PC market, fueled by the adoption of Windows 10.
Advertisement
Wall Street analysts had been predicting that Microsoft would report earnings of around 71c per share; in the event, the company reported 78c.
Microsoft said that all its commercial cloud businesses were running at an annual revenue rate of $9.4 billion as of the second quarter, compared with $5.5 billion for the same period in 2014. Excluding currency effects, revenues would have risen 3 percent and adjusted earnings 23 percent.
Revenue in Microsoft’s closely watched Intelligent Cloud segment grew by 5% to $6.3 billion.
Azure revenue skyrocketed 140% in constant currency, with revenue from Azure premium services tripling from one year prior.
With Lumia sales on the decline and Microsoft’s plan to not produce a large amount of handsets, it’s safe to bet that we’re witnessing the demise of Windows Phone. The fact that companies are moving much of their data onto the cloud proved a bright lucrative.
Microsoft shares rose in after-hours trading as it reported strong growth in its cloud computing and mobile applications divisions.
After accounting for almost $2 billion in deferred revenue and a few hundred million more in restructuring and integration charges among other adjustments, Microsoft reported non-GAAP earnings per share of $0.78 and revenues of $25.69 billion. However, the good performance of cloud was overshadowed by the continued failure of Windows Phones to get any traction in the market, with only 4.5m devices sold.
Windows revenue closely tracks sales of personal computers, which fell 10.6 percent globally in the December quarter from a year earlier, according to research firm IDC.
Microsoft returned $6.5 billion to shareholders in dividends.
More Personal Computing (MPC), which contains Windows, Devices, Gaming and Search: $12.7 billion.
Advertisement
The number of people using Xbox Live online service for digital content and video game play climbed 30 percent to a record high of 48 million, Microsoft said. That’s up from $672 million in Surface revenue the quarter before, and up from $1.1 billion year-over-year.
