Microsoft beats forecasts as cloud boosts quarterly results

Satya Nadella chief executive officer of Microsoft Corp. smiles during the Microsoft Developers Build Conference in Seattle Washington U.S. on Wednesday

Microsoft predicts that it will bring in 83 cents per share in earnings for its current quarter on an adjusted basis.

Revenue rose 12 percent to $24.54 billion. As usual, cloud services continue to be among the fastest growing parts of Microsoft's business.

Shares rose 2.6% to $80.74 in after-hours trading after results beat expectations. LinkedIn revenues amounted to $1.1 billion.

Search ad revenue increased by 15% thanks to higher search volume, as well as more revenue per search. "Reaching $20 billion would imply the commercial cloud mix could cross over 20% of revenue for the first time in the first quarter of fiscal 2018, up from 5% in early 2015".

As in previous quarters, the numbers most of us pundits are going to focus on revolve around Microsoft's cloud efforts.

LinkedIn reported revenue of $1.1 billion in the previous quarter and it once again came in at exactly the same number.




As you can see from the image above, the biggest areas of growth, in terms of percentage, are Azure, Dynamics 365, and Office 365 commercial.

While the software giant doesn't disclose revenue figures for those businesses, it said its commercial-cloud run-rate - the last month of sales of its Azure and Office 365 products, multiplied by 12 - hit $20.4 billion.

Despite Microsoft's More Personal Computing division remaining relatively flat (which, historically is a good thing) there were gains to be had for a few standout products.

Surface revenue increased by 12 percent driven by sales of the new Surface Laptop.

With its first fiscal quarter in the books, Microsoft is on track to achieve $20.4 billion in commercial cloud revenue from products like Azure, Office 365, and Dynamics 365, among others, it said in a release laying out its overall results. Although enterprise services revenue increased by 1 percent with growth in Premier Support Services offset by declines in custom support agreements.

Looking at Microsoft's past year, the company pushed heavily on its cloud business, including Microsoft Azure - which saw a revenue rise of 97 percent year-over-year last quarter.

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