Microsoft reported adjusted per-share earnings of 84 cents.
Revenues rose 11.7% from previous year to $24.5 billion, also topping analysts' view for $23.57 billion.
One of the most notable achievements of the quarter was to top the company's goal of a $20 billion in annualized revenue run rate for its commercial cloud business. As usual, cloud services continue to be among the fastest growing parts of Microsoft's business.
Microsoft (NASDAQ:MSFT) shares are up 3.68% aftermarket following Q1 results that beat EPS and revenue estimates, met a Cloud sales goal early, and didn't drown in the struggling global PC market. See the full release here.
Notably, however, Google managed to overtake Microsoft both in revenue and profit, generating $6.7 billion in profit on $27.7 billion revenue.
Microsoft Corp.'s push into the cloud forged ahead last quarter, with demand for online versions of Office productivity software and the Azure web-services business bolstering sales and earnings. This quarter, those numbers turned around as Surface revenue grew 12 percent. Azure gross margins were a "key component" of the 8 percentage point improvement in commercial cloud services from the same period previous year, Chief Financial Officer Amy Hood said. The rest is a 2% (2% in CC) increase in server revenue. Windows OEM revenue went up by just four percent and commercial Windows and cloud services increased by seven percent.
Despite Microsoft's More Personal Computing division remaining relatively flat (which, historically is a good thing) there were gains to be had for a few standout products. Search ad revenue excluding traffic acquisition costs grew 15%, and Surface revenue rose 12% driven by Surface Laptop sales.
"We have been impressed by solid execution and strong customer adoption of Microsoft's cloud applications and platforms", KeyBanc analyst Brent Bracelin wrote.
Microsoft reported revenue of $24.5 billion for the quarter, up almost 12 percent over the same period a year ago. The company had guided for between $23 billion and $23.7 billion, and in the year-ago quarter.
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