Microsoft significantly exceeded expectations in the last quarter thanks to a strong performance from its cloud business and a boost from increased Xbox sales.
Sales rose by 17 per cent to 43.1 billion dollars in the second fiscal quarter, which ended at the end of December, the software giant announced after the US stock market closed on Tuesday.
Analysts had expected around 40 billion dollars.
Profits jumped 33 per cent year-on-year to 15.5 billion dollars.
Microsoft chief executive Satya Nadella switched the company’s focus to cloud services – offering computing power and software from the web.
In the “intelligent cloud” division, revenue grew 23 per cent to 14.6 billion dollars last quarter.
A key factor in this was a 50 per cent increase in business for the Azure cloud platform, a Microsoft competitor to Amazon and Google.
Microsoft also saw a 40 per cent jump in revenue from the Xbox gaming console business, which saw the release of a new model.
Revenue from the Windows operating system increased by 10 per cent, while revenue from tablets and notebooks in the company’s Surface line grew by 3.5 per cent to just over 2 billion dollars.
In the past year, it has become particularly clear that a second wave of digital transformation is coming, which will affect every company and every industry, Nadella said.
Microsoft expects continued growth in the current quarter. Its stocks were up by as much as 4 per cent after the announcement.
