Microsoft Corporation (MSFT) Q1 Earnings Beat As Azure Sales Surge 90%

Intelligent Cloud: This segment, which includes results from server products and services (including Windows Server and Azure), grew 14 percent to $6.9 billion. The company has delivered early: In its Q1 2018 earnings released today, the company has shared its cloud annualized run rate has hit $20.4 billion.

The stock is up just 2 percent in after-hours trading now. At the same time, as new data centers come online and become more efficient, Microsoft has been making progress in increasing the profitability of these services, with commercial cloud gross margin widening to 57 percent.

Total revenue in the company's More Personal Computing division, which also includes the Windows operating system, was $9.4 billion, beating the $8.8 billion average estimate of four analysts polled by Bloomberg.

Microsoft Corp (MSFT.O) reported a better-than-expected quarterly profit on Thursday as demand for its cloud computing services for companies rose and personal computer software business stabilized. "Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform".

Microsoft ended the quarter with 28 million Office 365 consumer subscribers, up from 27 million from the previous quarter. Productivity revenue, mainly Office software, climbed 28 percent to $8.2 billion. Windows commercial products and cloud services up 6% due to annuity revenue growth.

Wall Street was expecting Microsoft to report first quarter earnings of 72 cents a share on revenue of $23.56 billion.

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.

On the Xbox front, Microsoft says hardware revenue declined significantly - due to lower pricing and fewer sales - but overall revenue still ticked up ever so slightly thanks to increased Xbox Live transactions.

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