Summits Yellow

Microsoft beats expectations as cloud computing service strengthens

Tim Maytom

Tech giant Microsoft has announced its 2018 Q1 results (which may sound odd, but is how Microsoft structures its finances), surpassing Wall Street expectations with revenues of $24.5bn (£18.7bn) and earnings per share of $0.84, and sending its stock price up by almost four per cent in after-hours trading.

Revenues were up 11 per cent year-on-year, with operating income of $7.7bn and net income of $6.6bn. One of the biggest successes was the growth of the firm’s cloud computing efforts, with reported revenues of $6.9bn, up 13 per cent year-on-year, and set to exceed $20bn in annual run rate by the end of 2018’s fiscal year, a target the company set for itself just over two years ago.

“Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft the help them transform,” said Satya Nadella, CEO of Microsoft.

Microsoft’s Azure cloud platform alone saw 90 per cent growth year-on-year, and it also saw decent gains in a wide variety of its business units, from its Office 365 commercial product (up 42 per cent year-on-year) to its Xbox software and services (up 20 per cent).

“Our strong start to the fiscal year reflects the impact of our continued investment in product innovation and sales capacity to capture expanding market opportunities,” said Amy Hood, executive vice president and chief financial officer for Microsoft.