Microsoft today announced its quarterly earnings for its first financial quarter of 2018 (yes, I know it's early, but that's how Microsoft's financial quarters work). Wall Street's crack team of financial analysts expected the company to report revenue of about $23.56 billion and earnings per share of $0.72.
The actual numbers the company reported today were $24.5 billion in GAAP revenue and $0.84 in non-GAAP earnings per share. In the year-ago-quarter, Microsoft reported earnings per share of $0.76 on revenue of $22.33 billion.
Ahead of today's earnings, Microsoft's stock hit record highs. The stock is up just 2 percent in after-hours trading now.
As in previous quarters, the numbers most of us pundits are going to focus on revolve around Microsoft's cloud efforts. Here, the company reported revenues of $6.9 billion for its Intelligent Cloud business units, which include server products and cloud services.
While the Azure cloud platform is included in this number, Microsoft sadly doesn't break out Azure revenue numbers. The company, however, has long said that it wanted its cloud services to reach an annual run rate of $20 billion by the end of its 2018 fiscal year. This year, Microsoft's commercial cloud run rate hit $20.4 billion. That's pretty unexpected and will surely drive much of the conversation around today's earnings release.
“This quarter we exceeded $20 billion in commercial cloud ARR, outpacing the goal we set just over two years ago,” said Satya Nadella, chief executive officer at Microsoft. “Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform.”
In the previous quarter, Microsoft said its run rate exceeded $18.9 billion and that Azure revenue growth was 97 percent. This quarter, Azure revenue was up 90 percent. Seems like cloud computing isn't a bad business to be in these days.
Despite this focus on the cloud, Microsoft's other business units also still make plenty of money. In the Productivity and Business Processes category, which includes the Office productivity suite, Dynamics, LinkedIn and other products, Microsoft reported revenue of $8.2 billion, up 28 percent.
LinkedIn reported revenue of $1.1 billion in the previous quarter and it once again came in at exactly the same number. The number of LinkedIn sessions is up 20 percent, though that's clearly not influencing the service's revenue all that much.
For the More Personal Computing segment, Microsoft reported $9.4 billion in revenue.
Over the last few quarters, Microsoft's Surface line reported declining revenue numbers as the company prepared to launch new products. This quarter, those numbers turned around as Surface revenue grew 12 percent. That's not really a surprise, given that Microsoft has launched a number of new Surface products over the course of the last few months. Anything but a substantial increase would have been quite a disappointment.
Windows OEM revenue was also up 4 percent and search advertising revenue increased 15 percent. Gaming revenue, however, only increased 1 percent, even as Xbox software and services revenue was up 21 percent.
- This article originally appeared on TechCrunch.