Microsoft’s second quarter 2017 revenue grew 12% to $28.9 billion, beating Wall Street’s expectations of $28.4 billion, thanks to accelerated growth in Microsoft cloud computing business.
The cloud business has been continuously strengthening the revenue growth of Microsoft. The tech giant declared a quarterly profit increase of 16% in first quarter on the strength of its commercial cloud business that includes Azure, Office 365, Dynamics 365, and Enterprise mobility.
“This quarter’s results speak to the differentiated value we are delivering to customers across our productivity solutions and as the hybrid cloud provider of choice,” said Satya Nadella, chief executive officer of Microsoft. “Our investments in IoT, data, and AI services across cloud and the edge position us to further accelerate growth.”
The revenue of Office commercial products and cloud services, including Office 365 commercial showed a growth of 10%, while the Office consumer products and services revenue grew 12%. Microsoft said that its Office 365 consumer subscribers increased to 29.2 million.
The revenue in Intelligent Cloud, which includes server products, cloud services, and Enterprise Services, increased 15% to $7.8 billion.
“We delivered another strong quarter with commercial cloud revenue growing 56% year-over-year to $5.3 billion,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “Strong execution from our sales teams and partners is driving growth across our businesses.”
On the other hand, the dynamic products and cloud services revenue increased 10%, which was driven by revenue growth of 67% in Dynamics 365. LinkedIn was another service to contribute revenue of $1.3 billion during the quarter.
The total revenue includes a net charge of $13.8 billion related to Tax Cuts and Jobs Act (TCJA). Microsoft returned around $5 billion to shareholders in the form of share repurchases and dividends.
Despite that, the shares fell over 1% in after-market trading, declining around 2.5% of the total gain in earlier trading.