Microsoft Corporation FQ1 2018 Earnings Boosts Shares

Microsoft easily beats the street as its cloud run rate passes $20B a year early

In the previous quarter, Microsoft said its run rate exceeded $18.9 billion and that Azure revenue growth was 97 percent.

Office consumer products and cloud services revenue increased by 12% (10% in CC), and there are now 28 million consumer Office 365 subscribers.

Back in April 2015, Microsoft CEO Satya Nadella set the cloud revenue goal as a way of changing perceptions of Microsoft both inside and outside the company.

Windows Phone is dead, the company's fitness-focused wristband has been axed and its streaming music service is no more, and Microsoft investors couldn't be happier with the company.

Following the Microsoft FQ1 2018 earnings release, the company's stock surged in after-hours trades, climbing by as much as 2.51% to $80.74.




In the year-ago-quarter, Microsoft reported earnings per share of $0.76 on revenue of $22.33 billion. At the same time, as new data centers come online and become more efficient, Microsoft has been making progress in increasing the profitability of these services, with commercial cloud gross margin widening to 57 percent. This quarter, Azure revenue was up 90 percent.

While the Azure cloud platform is included in this number, Microsoft sadly doesn't break out Azure revenue numbers. The overall market has continued to contract, and Microsoft's Surface devices fluctuate in popularity based on competition and when new devices hit store shelves.

Gaming revenue increased by 1% (0% in CC), because strength in Xbox software and services - which grew by 21% (20% in CC) offset hardware sales.

Revenue: $24.5 billion versus $23.56 billion expected. By contrast, the PC industry as a whole is still shrinking. This report is for the first quarter of its 2018 fiscal year, or the third quarter of the 2017 calendar year.

Productivity and Business Processes: This segment, which includes results from Office and Office 365 (commercial and consumer customers), grew 28 percent to $8.2 billion.

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