Within this unit, the server products and cloud services revenue grew 10 percent and “Azure Cloud” revenue grew 140 percent. Office 365 is also doing well, with subscribers now topping 20.6 million with revenue growth of 70 percent in constant currency.
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The company’s combined cloud business was on track for $9.4 billion in annual revenue, the company said, up 15 percent from the $8.2 billion revenue it estimated last quarter.
Microsoft says Windows revenue from PC manufacturers is down 5% – beating the overall decline in the shrinking PC market, but still noteworthy.
Revenue on phones sold fell by 49 per cent but the Microsoft Devices sector saw revenue grow by $3.3 billion (£2.3 billion) quarterly to $12.7 billion (£8.8 billion), driven by strong sales of its Surface tablet range.
Revenue in Productivity and Business Processes declined 2pc to $6.7bn.
All of this is despite the fact that Microsoft launched two Windows 10 Mobile phones at the end of 2015, the Microsoft Lumia 950 and Lumia 950 XL.
Analysts on average had expected a profit of 71c per share and revenue of $25.26bn, according to Thomson Reuters IBES.
According to thebroadband, Microsoft has told analysts to expect a similar drop in revenue in the coming quarter. Our commercial business executed well as our sales teams and partners helped customers realize the value of Microsoft’s cloud technologies across Azure, Office 365 and CRM Online. The company pulled in revenue of $25.7 billion in constant currency, and $0.78 earnings per share.
CEO Satya Nadella has focused on cloud services and mobile applications on slower growth in its traditional software business.
The company noted that its Windows 10 product is now active on over 200 million devices.
“Users on the Windows Phone platform keeps declining and have moved to other platforms, but [we] didn’t notice that Microsoft is showing any effort to retain them”, the company said.
Microsoft’s shares were up 5.3 per cent in after-hours trading on Thursday.
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Microsoft has reported a five percent growth in its “Intelligent Cloud” division, which includes sales of its Azure public cloud services.
