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Cloud-driven Microsoft crosses $100bn revenue for first time

20 July 2018

Microsoft stock jumped more than 4% in after-hours trading as the company beat analyst expectations with earnings for the quarter of $8.8bn, or $1.14 per share. Net income, meanwhile, was up 10 percent to $8 billion.

In particular, the fourth quarter saw Microsoft's Office commercial products and cloud services increase revenue by 10 percent, mostly driven by 38 percent growth in Office 365 commercial revenue.

"Our early investments in the intelligent cloud and intelligent edge are paying off, and we will continue to expand our reach in large and growing markets with differentiated innovation", he added.

Much of Microsoft's recent growth has been fueled by its cloud computing business, which has benefited from companies rushing to shift their workloads to the cloud to cut data storage and software costs.

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Intelligent Cloud revenues were $9.6bn, up 20 per cent. Server business revenues were up 24 per cent.

Microsoft shares have risen 180 percent since Satya Nadella took over as chief executive in 2014, refocusing the company on cloud computing rather than PC software. Though Amazon Web Services has long led the cloud computing market, Microsoft is increasingly cementing its position as a strong second, ahead of its rival Google.

Microsoft returned $5.3 billion to shareholders in the form of dividends and share repurchases in the fourth quarter of fiscal year 2018, an increase of 16 per cent compared to the fourth quarter of fiscal year 2017.

Productivity and Business Processes were $9.7bn, up 10 per cent. Office commercial revenues were up 8 per cent, while Office consumer revenues were up 6 per cent. LinkedIn revenues were up 34 per cent. Gaming revenue grew 39 percent over a year ago to almost $2.29 billion.

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Analyst Patrick Moorhead at Moor Insights & Strategy said Microsoft's results showed healthy growth.

In a major deal announced this week, Microsoft and Walmart unveiled a strategic partnership to help the retail giant ramp up its efforts against Amazon.

"We had an incredible year, surpassing $100 billion in revenue as a result of our teams' relentless focus on customer success", said Satya Nadella, CEO, Microsoft.

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Cloud-driven Microsoft crosses $100bn revenue for first time