Microsoft cloud computing bets pay off as revenue grows 150%

Financials reveal smaller drop in profit than previously predicted
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Microsoft has announced its Q3 results, revealing a revenue boost on the back of its cloud computing investments.

The company stated that revenue for for the quarter, which ended on March 31st, was $20.40 billion (£12.14 billion). 

Net profit was $5.66 billion (£3.37 billion) – a fall of 6.5 per cent year-on-year, beating previous predictions of a harsher decline.

The optimistic outcome was partly driven by the success of Microsoft’s cloud computing solution Windows Azure, which saw revenue grow over 150 per cent.

The firm has already announced yet more investment in the sector, with more than 40 new features set to join the Azure platform, to make it more attractive to cloud application developers.

"This quarter's results demonstrate the strength of our business, as well as the opportunities we see in a mobile-first, cloud-first world,” said Satya Nadella, Microsoft CEO.

“We are making good progress in our consumer services like Bing and Office 365 Home, and our commercial customers continue to embrace our cloud solutions. Both position us well for long-term growth."

Microsoft added that commercial revenue for products such as Azure and Office 365 had grown seven per cent to reach $12.23 billion (£7.28bn).

Office 365 revenue alone grew over 100 per cent, with the Office 365 Home edition of the productivity software gaining almost one million new subscribers in three months, bringing the total number of subscribers to 4.4 million.

"We delivered solid, broad-based financial results driven by strong execution and continued cost discipline," added Amy Hood, EVP and CFO at Microsoft.

"We are focusing our resources to drive growth and long-term shareholder value."

"Our products and services continue to deliver differentiated business value to our customers, and we continue to win share in areas like cloud services, data platform and infrastructure management," commented Kevin Turner, COO at Microsoft.

Devices and consumer revenue grew 12 per cent to hit $8.3 billion (£4.94bn), with Windows OEM revenue growing four per cent, driven by a 19 per cent increase in Windows OEM Pro revenue.

Microsoft also revealed that it sold in two million Xbox console units, including 1.2 million units of its Xbox One console, which launched in November.

Revenue for the Surface family of tablets grew over 50 per cent to approximately $500 million (£297.6m).

The range of Microsoft’s flagship tablet devices could soon be set to expand to include smaller form-factor devices, if recent reports prove accurate.

Rumours of a ‘Surface Mini’ were sparked by the listing of a ‘Microsoft Surface Mini Smart Cover Case’ on Amazon, with a release date set for May 18th.

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