Microsoft Corp beat Wall Street expectations for quarterly revenue on Tuesday, as demand soared for the software giant's cloud-based services from businesses adopting hybrid work models.
Orders for cloud services provided by Microsoft, Amazon.com Inc's AWS and Alphabet Inc-owned Google Cloud have surged since last year when the COVID-19 pandemic shut offices and schools, pushing more activity online.
Microsoft said revenue from its "Intelligent Cloud" segment rose 31% to $17 billion. Analysts had expected a figure of $16.58 billion, according to Refinitiv data.
Revenue growth for Azure, the company's flagship cloud-computing business, came in at 48% to beat analysts' estimates of 47.5%, according to consensus data from Visible Alpha.
Azure's growth rate is the best direct measure of competition with rivals such as AWS and Google Cloud as Microsoft does not break out revenue from the cloud-computing unit.
"We delivered a strong start to the fiscal year with our Microsoft Cloud generating $20.7 billion in revenue for the quarter, up 36% year over year," said Amy Hood https://bit.ly/3CdmwfL, executive vice president and chief financial officer of Microsoft.
Overall, revenue rose to $45.32 billion in the first quarter ended Sept. 30, from $37.15 billion a year earlier, beating expectations of about $43.97 billion.
Net income rose to $20.51 billion, or $2.71 per share, from $13.89 billion, or $1.82 per share, a year earlier. The company said its results included a $3.3 billion net income tax benefit.
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