Published: Thu, October 25, 2018
Markets | By Otis Pena

Microsoft tops estimates as cloud-fueled growth spree persists

Microsoft tops estimates as cloud-fueled growth spree persists

Commercial cloud revenue, a slightly different key metric for Microsoft over the past few years that also includes the commercial version of Office 365, Dynamics 365 and now commercial LinkedIn services, increased 47 percent to $8.5 billion. The gross margin percentage increased because of material improvements in Azure gross margin offset by an increased mix of cloud offerings.

Microsoft reported quarterly earnings Wednesday that once again beat analyst expectations, rising on the strength of its growing cloud computing business.

And sales of its Surface hardware grew 14% year-over-year, to $1.04 billion.

Microsoft now has three reporting segments: Productivity and Business Processes (covering Office, Exchange, SharePoint, Skype, Dynamics, and LinkedIn), Intelligent Cloud (including Azure, Windows Server, SQL Server, Visual Studio, and Enterprise Services), and More Personal Computing (covering Windows, hardware, and Xbox, as well as search and advertising).

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In less glamorous news, Microsoft's Productivity and Business Process raised $9.8 billion in revenue this quarter, leading to an 18% growth year over year for the division. Other products from that group helping the bottom line included Windows "commercial products and cloud services", which increased revenue 12 percent. Dynamics revenue is up 20 percent, and LinkedIn revenue has grown 33 percent.

Microsoft continued to keep Azure's revenue a secret, and reported growth of 76 percent in revenue for its public cloud infrastructure service during the quarter. Windows Pro revenue was up 8 percent, in contrast to non-Pro revenue dropping by 5 percent.

The company said it returned $6.1 billion (roughly Rs. 44,700 crores) to shareholders during the quarter in the form of dividends or share buy-backs.

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