Microsoft Report Massive Spike In Profits Due To Azure Cloud

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Top growth factors for Microsoft were the cloud-computing Azure service and Office 365 offerings which both helped drive a $30.09 billion dollar quarter.

Microsoft has announced technology partnerships with other major firms in recent months including General Electric, Starbucks, Bayer, Spain's Telefonica and sports organisations such as the National Basketball Association and PGA.

CEO Satya Nadella told analysts on an earnings call on July 19, "The one thing that I would say that I'm increasingly seeing is Tier 1 workloads".

Unfortunately, reporting about Microsoft's cloud growth can be a rather tiresome endeavor, unless you're an Azure customer, company investor, or understand exactly what "Intelligent Cloud" entails.

Despite Microsoft's reluctance to mention Windows by name as it used to, the company's tried and true work horse continues to buoy the business in some regards. With cloud demand rising, Microsoft has also said it will continue to invest. Many of those deals included more than one cloud product, he said.

While cloud software has become more popular in recent years, nobody expected it to be quite this good. Those using or planning to use Azure rose to more than 70%.

Microsoft Report Massive Spike In Profits Due To Azure Cloud
Microsoft Report Massive Spike In Profits Due To Azure Cloud

Microsoft was up almost 22% this year through Thursday.

Lastly, Microsoft's Bing efforts are still putt-putting along with the search platform tracking a 17% revenue growth with a few asterisk tossed into the mix. The two companies are adding new cloud services and duking it out for customers as number-three player Google tries to catch up. Azure revenue was up 89 percent from a year ago in the fourth quarter. It was up 23 percent YoY to $9.6 billion for the quarter, and reached $32.2 billion for the year, marking a 15 percent increase. That compares to the $9.64-billion average estimate.

"Exceptional sales execution delivered double-digit revenue growth across all segments and strong progress against our strategic priorities, anchored by commercial cloud revenue growing 53 per cent year-over-year to $6.9 billion", said Amy Hood, Executive Vice President and Chief Financial Officer of Microsoft.

Revenue for LinkedIn, the professional social networking site, increased 37% to $1.4bn, though the division saw an overall operating loss of $182m.

Revenue in Personal Computing was $10.8 billion and increased 17 per cent. Gaming revenue increased 39 per cent, with Xbox software and services revenue growth of 36 per cent.

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