Analysts polled by Thomson Reuters had expected per-share profit of 59 cents and revenue of $21.03 billion.
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Microsoft stock jumped more than 9% in after-hours trading following the earnings news, putting the company’s shares at their highest level since March 2000, when the dot-com bubble burst.
Shares of Microsoft (NASDAQ:MSFT) were up 10% as of 12:45 p.m. Friday following the release on Thursday of its fiscal-first-quarter earnings report.
“We’re seeing great traction with businesses who want to bring Microsoft’s cloud, mobile device management technology and data analytics together to improve security and productivity”, said Microsoft COO Kevin Turner.
Starting with the September quarter, Microsoft is reporting revenue and operating income for three segments: Productivity & Business Processes, Intelligent Cloud, and More Personal Computing.
Server products and cloud services revenue grew 13 per cent in constant currency. Windows Phone revenues fell by a whopping 54 percent for the quarter, once again highlighting its continued struggles in the smartphone market. Nadella said that the commercial cloud group’s annualized run rate is around $8.2 billion. Office remains particularly strong – Office 365, Microsoft’s subscription-based service, enjoyed 70% revenue growth in constant-currency terms. Windows sales to PC makers like Dell and HP still fell 6% (less than the 11% overall decline of third-quarter PC shipments, according to industry tracker IDC).
The GAAP numbers were listed as $0.57 in earnings per share on $20.4 billion in revenue. For his goal to work, though, Microsoft needs to quickly get the latest software into as many devices as it can, even if it means taking a short-term hit on revenue.
Indeed, Microsoft seems to be killing it in the cloud services space.
Office: Microsoft is also seeing growth in Office 365, another cloud-based offering, as subscribers increased 3 million in the quarter to 18.2 million. However, the tech company made no official announcement this move, especially in light of its recent earnings release. By increasingly integrating Cortana, Microsoft’s personal digital assistant which is powered by Bing, directly into various Windows 10 devices, Microsoft is boosting the volume of Bing searches.
The number of monthly active Xbox Live subscribers grew 28 percent, to 29 million.
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The company’s cloud segment, which includes revenue from the Azure cloud platform, Windows Server software and Enterprise Services division, was its shining star for the quarter. The company says Windows 10 launch “spurred PC ecosystem innovation and helped drive hardware mix toward premium devices” but the reality is it wasn’t enough to see growth.
