Growth at Microsoft’s Azure cloud platform re-accelerated in the latest quarter to produce its strongest performance in nearly two years, according to figures released late on Tuesday.
The strong cloud growth helped lift Microsoft’s revenue and earnings above Wall Street expectations for the period, easing some of the concerns about the extent of a potential post-coronavirus pandemic deceleration in IT spending.
Revenue from Azure, excluding the effects of currency movements, was up 49 per cent in the three months to the end of March, the software company said. That was three percentage points higher than the preceding quarter, extending Microsoft’s recent success in eating into the commanding cloud market share of Amazon Web Services.
It comes as Microsoft has faced criticism in some quarters for recent licensing changes that have raised costs for customers using its software on rival cloud platforms.
Revenue in the latest quarter grew by 18 per cent to $49.4bn, while earnings per share rose to $2.22. That compared with $1.95 a share the year before, excluding a one-off tax benefit. Wall Street had been expecting revenue of $49bn and earnings per share of $2.18.
The results showed that a pandemic boom in PC sales had eased and growth from Windows sales slowed. The company’s “more personal computing” division, which includes its PC and gaming businesses, reported revenue growth of 11 per cent, to $14.5bn. By comparison, growth from the intelligent cloud division jumped 27 per cent, while the productivity and business process unit grew 17 per cent.
Microsoft’s shares were largely unchanged in after-market trading, ahead of a call with analysts during which it was due to issue a forecast for the current quarter. Its shares fell nearly 4 per cent ahead of the earnings on Tuesday, leaving them a third below their November record high.