Right after Microsoft reported its better-than-expected performance for the previous quarter, its stock price jumped by more than 7 percent. Ahead of Microsoft’s earnings, Raymond James analyst Michael Turits estimated that Microsoft’s Azure business would hit $501 million in revenue in the December quarter. The company pulled in revenue of $25.7 billion in constant currency, and $0.78 earnings per share.
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Microsoft shares were up about 8% to around $56 a share after announcing results. But during the earnings call, Nadella and other Microsoft execs stressed the success of the company’s cloud computing platform, Azure, and productivity software, Office 365-both of which showed significant growth. Office commercial products and cloud services revenue grew 5 percent with Office 365 revenue growth of almost 70 percent. Microsoft also did not reveal how many Xbox One consoles it sold this quarter.
Total revenue, however, fell 10.1% to $23.8bn, squeezed by a strong dollar as well as a weak personal computer market that has reduced demand for Microsoft’s Windows operating system.
Phone revenue declined 49 percent.
Intelligent Cloud (IC), which includes service revenue and Enterprise Services: $6.4 billion compared to $5.9 billion in the last quarter.
Satya Nadella, Microsoft’s chief executive said: “Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas”.
‘Our commercial business executed well as our sales teams and partners helped customers realize the value of Microsoft’s cloud technologies’. This represents a growth rate of 14.6% every quarter, which suggest that it cloud revenue could surpass its own expectations.
Surface revenue increased 29 percent driven by the launch of Surface Pro 4 and Surface Book.
This division, which includes Office and Dynamics, generated $6.7 billion, which represents a decline of 2% year over year due to currency fluctuations.
Amazon and its fast-growing Amazon Web Services business is a formidable opponent in cloud computing, though.
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Azure revenues were up 140 percent in constant currency.
