Microsoft's shares jumped by up to five per cent in after-hours trading last night as the vendor announced record first-quarter sales which smashed Wall Street expectations.
For the three months to 30 September, Microsoft's net profit rocketed 17 per cent annually to $5.24bn (£3.23bn) on record sales which shot up 16 per cent year on year to $18.53bn – well above analysts' forecasts of $17.79bn.
Its Devices and Consumer revenue crept up four per cent compared to last year's Q1 to $7.46bn, but its Commercial revenue reached $11.2bn after seeing a 10 per cent year-on-year surge. Its enterprise sales spike was driven by its SQL Server sales which grew in double digits, along with its Lync, SharePoint and Exchange offerings which collectively grew a similar amount over the quarter, according to the vendor.
Commercial cloud revenue doubled in Q1 while its commercial licensing sales swelled seven per cent to $9.6bn – a figure Microsoft thinks will jump to between $10.7bn and $10.9bn in the next quarter.
In its full-year and Q4 results last quarter, the vendor absorbed a $900m writedown on the value of its Surface tablets, but this quarter it seemed more optimistic, claiming tablet sales grew to $400m following a sequential boom in both revenue and the number of units sold – although it did not divulge exact numbers.
Microsoft's chief financial officer Amy Hood said Surface was making great progress but the firm is not satisfied yet.
"We more than doubled the number of units we sold over the prior quarter," she said. "In terms of mix, Surface RT did better than expected. With Surface Pro, we saw some customers delay purchase in anticipation of Surface Pro 2 which delivers significantly improved battery and processor performance.
"While we feel good about the increased traction we saw with Surface this quarter, we know there is more to do."
Regionally, Microsoft said its US business and parts of Western Europe were particularly strong, but that China was struggling.
The software giant did not shed any more light on who will replace outgoing chief executive Steve Ballmer (pictured), but the Microsoft boss did say his firm's transition to becoming a devices and services firm was progressing at full steam.
"Our devices and services transformation is progressing and we are launching a wide range of compelling products and experiences this fall for both business and consumers," he said.
"Our new commercial services will help us continue to outgrow the enterprise market."
Today saw 14 of the UK IT channel's biggest hitters come together to determine the winners of CRN's WiC awards. But what does being a WiC judge actually involve? Doug Woodburn reports
'Smaller firms may struggle to keep up with Microsoft's innovation with Dynamics' says CEO Stuart Fenton after acquiring assets from Profile Enterprise Solutions
Pete Peterson admits the firm hasn't always been the 'easiest company to do business with'
New chief exec Aaron Painter says 'longer-term strategy' could see firm tackle the Asian market