Revenue from Azure, which competes with Amazon.com Inc's (AMZN.O) Amazon Web Services and offerings from Alphabet Inc's (GOOGL.O) Google, IBM (IBM.N) and Oracle Corp (ORCL.N), grew 90 percent compared to a 97 percent growth rate in the preceding quarter. Dynamics products and cloud services sales were up 13% due to a 69% growth in Dynamics 365. As predicted Microsoft was able to beat their 2015 goal of $20 billion in annualized run rate for the commercial cloud.
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.
Microsoft's stock price climbed 2.8 percent to $80.97 in early after-hours trading Thursday after the results were released.More news: National park fee increase could price out many visitors
More news: Iraq's Kurds offer to freeze results of independence vote
More news: IPhone X pre-booking has already started at a few stores
In terms of guidance, analysts are looking for Microsoft to hit 83 cents in earnings per share, excluding certain items, and $28.15 billion in revenue in the second quarter, which will end on December 31, according to Thomson Reuters. The company had guided for between $23 billion and $23.7 billion, and in the year-ago quarter. Office commercial products and cloud services grew by 10% (10% in CC), including an increase for Office 365 commercial by 42% (42% in CC), and a 17% (17% in CC) decline in Office commercial products. "Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform".
As you can see from the image above, the biggest areas of growth, in terms of percentage, are Azure, Dynamics 365, and Office 365 commercial. LinkedIn contributed $1.1B. Windows OEM was up 4%, which is expected in the current PC market.
Over the last few quarters, Microsoft's Surface line reported declining revenue numbers as the company prepared to launch new products. Surface hardware sales jumped 12 percent largely driven by the new Surface Laptop.