Microsoft Cloud Strength Highlights Third Quarter Results

Microsoft announce financial results for the quarter ended March 31, 2017:

  • Revenue was $22.1 billion GAAP, and $23.6 billion non-GAAP
  • Operating income was $5.6 billion GAAP, and $7.1 billion non-GAAP
  • Net income was $4.8 billion GAAP, and $5.7 billion non-GAAP
  • Diluted earnings per share was $0.61 GAAP, and $0.73 non-GAAP

“Our results this quarter reflect the trust customers are placing in the Microsoft Cloud,” said Satya Nadella, chief executive officer at Microsoft. “From large multi-nationals to small and medium businesses to non-profits all over the world, organizations are using Microsoft’s cloud platforms to power their digital transformation.”

Microsoft — the No. 2 player in cloud computing, after Amazon,  is steadily making the transition to that business, relying less and less on personal computer software, the company’s mainstay for decades.

Over the quarter Microsoft’s Azure cloud hosting business grew by 93 percent from the year-earlier quarter. And the cloud version of its productivity software Office 365, sold to companies as an online service, grew by 45 percent. Impressive growth.

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“We’re seeing continued strong demand for our commercial cloud-based services,” Amy Hood, Microsoft’s chief financial officer, said in an interview.

Key Details

Microsoft said that for the three months ended in March, revenue in its Intelligent Cloud business came in at $6.8 billion up 11% compared to the year ago and up 12% on a constant currency basis.

During the quarter Microsoft said server products and cloud services revenue increased 15%, driven by Azure cloud revenue growth of 93%. Enterprise services revenue declined 1% with a decrease in custom support agreements offsetting growth in Premier Support Services and consulting.

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