Microsoft’s Q1 strong as commercial cloud hits $34 billion annual revenue run rate | Industry
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Microsoft’s first quarter was strong across the board as its commercial cloud, which now includes LinkedIn’s enterprise sales, continued its momentum and hit a $34 billion annual revenue run rate.
Microsoft reported net income of $8.8 billion, or $1.14 a share, on revenue of $29.1 billion, up 19 percent from a year ago.
Wall Street was looking for Microsoft to report first quarter earnings of 96 cents a share on revenue of $27.9 billion.
Microsoft’s core businesses fared well. Productivity and business process revenue was $9.8 billion, up 19 percent. Office commercial products and cloud services revenue surged 16 percent led by Office 365 revenue growth of 36 percent. Consumer Office 365 ended the quarter with 32.5 million subscribers.
Dynamics products and cloud services revenue was up 20 percent and LinkedIn saw sales gain 33 percent from a year ago.
Intelligent Cloud revenue was $8.6 billion, up 24 percent from a year ago led by server products and services. Azure revenue growth was up 76 percent. Azure growth of 76 percent in the first quarter was down from 89 percent in the fourth quarter and 93 percent in the third quarter.
The More Personal Computing unit saw sales of $10.7 billion, up 15 percent due to commercial sales, gaming revenue and Surface sales gains of 14 percent. It’s also worth noting that Microsoft’s Windows revenue is faring well on the enterprise side, but flagging a bit with consumers. Surface first quarter revenue of $1.18 billion was essentially flat with the fourth quarter.