Microsoft cloud annualized run rate passes $20 billion

Mandy Carr
October 27, 2017

Microsoft today announced its quarterly earnings for its first financial quarter of 2018 (yes, I know it's early, but that's how Microsoft's financial quarters work).

Overall, Microsoft posted $6.58 billion in net income, or 84 cents a share, compared with a profit of $5.67 billion, or 72 cents a share, a year ago.

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. As usual, cloud services continue to be among the fastest growing parts of Microsoft's business.

The stock further gained $2.91 or 3.69% in the after-hours trade. With no new console on sale, revenue is sure to be hard to come by as the company looks to invigorate its smaller user base into more digital transactions.

"A slowly improving PC environment is also a modest tailwind for Microsoft with cloud remaining the Trojan horse growth driver for Redmond over the coming years".

Intelligent Cloud revenue rose 14% to $6.9 billion, including a 17% increase in server products and cloud revenue and a 1% increase in Enterprise Services revenue.

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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.

Azure, Microsoft's cloud unit, saw revenue growth of 90% in the latest period. Operating expenses were $8.6 billion, an increase of 16% (15% in CC) over previous year. Windows OEM revenue was also up 4 percent and search advertising revenue increases 15 percent.

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

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.

While the Azure cloud platform is included in this number, Microsoft sadly doesn't break out Azure revenue numbers. Revenue in Intelligent Cloud rose 14% to $6.92 billion, while revenue in Productivity and Business Processes climbed 28% to $8.24 billion.

Other reports by Guamnewswatch

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