After being static for a while now, the software giant Microsoft has seen its figures go through the roof, thanks mostly to its cloud technology.
Microsoft reported better than expected quarterly adjusted revenue boosted by burgeoning demand for its cloud products. This sent the value of its shares soaring by 9.8 percent.
Chief Executive Satya Nadella has been shifting the company focus to software and cloud services as demand for the Windows operating system slows in a weak PC market. The figures seem to show he was right.
Revenue from Microsoft’s cloud business, which includes products such as Windows Server and cloud-based platforms such as Azure, rose 8 percent to $5.9 billion and is expected to reach $6.2-$6.3 billion in the current quarter.
Microsoft has also been cutting costs and fired some of its staff, streamlining its operations to focus on more lucrative businesses.
“The job reductions were spread across more than one business area and country and reflect adaptations to business needs,” a spokeswoman said in an email. The cuts are in addition to the 7,800 jobs Microsoft said it would cut in July.
Excluding the impact of the strong dollar, revenue in the business rose 14 percent, accounting for about 29 percent of overall revenue in the quarter ended September 30.
The results were the first to include Windows 10, Microsoft’s first new operating system in almost three years..
Sales of Windows to computer makers fell six percent in the quarter – slowing from the double-digit declines seen in recent quarters.
The big test for Windows will be in coming quarters as Microsoft rolls out its latest devices, including its first laptop, a revamped Surface Pro tablet and new Lumia phones.
Revenue in the business that includes Windows, fell 17 percent to $9.4 billion, accounting for 46 percent of total revenue, and is forecast to hit $12.0-$12.4 billion in the current quarter.
Microsoft got about 54 percent of its revenue from outside the United States in 2015.
The company’s net income rose to $4.62 billion in the quarter, from $4.54 billion last year.
Adjusted revenue fell 6.6 percent to $21.66 billion. Analysts on average were expecting revenue of $21.03 billion.