Revenue from Azure, Microsoft’s cloud computing service, grew 90 percent during the fiscal first quarter. Total revenue climbed 12 percent as profit rose 16 percent.
Microsoft handily beat analysts’ expectations for the first quarter of its fiscal year, as its quarterly profit rose 16 percent on the strength of its commercial cloud business.
Revenue from Azure, the company’s cloud-computing service, grew 90 percent during the quarter, Microsoft said.
The company has been pushing heavily into cloud services, including Azure and its subscription-based Office 365 product — businesses that both the company and analysts see as increasingly important future growth areas for Microsoft. This quarter’s results continue to prove that Microsoft’s cloud business is a major player in the market, offering fierce competition to the leading Amazon Web Services.
Microsoft also announced it hit a big cloud goal it set for itself in 2015: a $20 billion annualized revenue run rate for the commercial cloud. The company calculates the run rate by taking commercial cloud sales from the last month of the quarter and multiplying it by 12 to represent a whole year.
Microsoft, which had said it would hit the run-rate goal during this fiscal year, reached it in the first quarter with a tally of $20.4 billion.
The commercial side of Office 365, which makes up a significant chunk of Microsoft’s cloud business, now has 120 million business users.
The Redmond company continues to reel in large cloud-computing customers, including a recent deal with fellow Puget Sound-area corporate giant Costco.
Microsoft reported overall revenue of $24.5 billion for the quarter, up nearly 12 percent from the same period last year. Profit for the quarter climbed to $6.6 billion from $5.7 billion in the first quarter last year.
The company’s stalwart Windows, Xbox and PC businesses are still the biggest sales generators, bringing in a combined $9.4 billion of revenue. The only piece of that segment — which Microsoft dubs “more personal computing” — that posted a revenue decline was the now-de-emphasized phone business, which dropped $315 million.
Surface sales grew 12 percent during the quarter, largely from sales of its new laptop.
Analysts surveyed by S&P Global Market Intelligence expected the company to report $23.6 billion in revenue and 72 cents in adjusted earnings per share. Microsoft reported adjusted per-share earnings of 84 cents.
Microsoft’s stock price climbed 4.2 percent to $82.02 in extended trading Thursday after the results were released.