Revenue was $25.7 billion or $23.8 billion on a GAAP basis, compared to the consensus of $25.26 billion.
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Analysts polled by Thomson Reuters expected earnings per share of $0.71 and revenues of $25.3 billion.
The company stock was at $55.50 in early after-hours trading, up 6.62 percent from market close at $52.06. Other companies like Google and IBM lag behind, as Microsoft’s growth in cloud accelerates.
The company guided Q116 revenues of $26.5-$29.0 billion, as compared to analysts’ expectations of $27.72 billion.
Intelligent cloud revenue rose 5% (up 11% in constant currency) and Windows OEM revenue declined 5% in constant currency. That measure, which includes Azure plus other businesses like Office 365, is up 15 per cent from the $8.2 billion revenue it estimated last quarter. According to Microsoft, “Office commercial products and cloud services” revenue grew five per cent in constant currency, “driven by Office 365 revenue growth of almost 70 per cent”.
At this point, steady Office 365 growth is not much of a surprise.
Microsoft confirmed that its devices revenue sank 22 per cent, which can largely be attributed to its troubled smartphones business.
In addition to the impact of declining new PC sales, Microsoft’s Windows Phone devices also struggled in what should have been a strong quarter.
Azure revenue grew 140 percent with revenue from Azure premium services growing almost 3x.
‘Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas, ‘ said Microsoft chief executive Satya Nadella.
Microsoft’s aggressive campaign to promote Windows 10 has already led to its deployment on more than 200 million devices since its July release.
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There was also good news for the company’s hugely popular games console, Xbox, with membership of its online platform Xbox Live rising by 30% to more than 48 million. The company chose to lay off thousands of people from its phone division past year and refocus on building a relatively small number of Windows Phone handsets rather than keep making the broad range of phones that Nokia had prior to its acquisition in 2014. On the smartphone side of things, Microsoft’s Windows Phone revenue fell 49 percent year over year.
