Microsoft Corp topped Wall Street forecasts for quarterly profit as it signed up more businesses to its Azure cloud computing services and Office 365 productivity suite.
Much of Microsoft’s recent growth has been fueled by its cloud computing business as more enterprises seek to cut data storage costs by adopting cloud-based software and moving their applications to data centers.
The company’s flagship cloud product Azure, which competes with Amazon.com Inc’s dominant cloud infrastructure offering Amazon Web Services (AWS), recorded revenue growth of 93 percent in the three months ended March 31.
Azure’s growth has propelled Microsoft to the No. 2 position in the $15.6 billion cloud computing market with a 14 percent share, behind AWS, which holds a 32 percent slice of the market, research firm Canalys estimated in February.
Revenue at Microsoft’s productivity and business processes unit, which includes Office 365, rose 17 percent to $9 billion, topping analysts’ average expectation of $8.73 billion, according to Reuters.
Overall, the Redmond, Washington-based software giant’s revenue rose 16 percent to $26.82 billion, ahead of expectations of $25.77 billion.
Microsoft said https://www.microsoft.com/en-us/Investor/earnings/FY-2018-Q3/press-release-webcast net income rose to $7.42 billion or 95 cents per share in the third quarter ended March 31, from $5.49 billion or 70 cents per share, a year earlier.
Analysts had expected earnings of 85 cents per share.
Microsoft’s shares fell about 1 percent in after-hours trading on Thursday.