Nadella has led a transformation at Microsoft from a company focused on software installed on machines in homes and businesses to making money from services hosted on the internet and available from a broad array of devices regardless of who makes them. A big part of that increase was Xbox hardware revenue, which increased 94 percent year-over-year.
Microsoft's revenue increased by 19 percent compared to Q1 2018, while the company's operating income increased by 29 percent compared to Q1 2018.
Blair Hanley Frank, principal analyst at technology research and advisory firm ISG, said investors have been alerted to Azure's slower growth. You can see revenue from software and hardware grew strongly.More news: 1 winning ticket in SC claims $1.6 billion Mega Millions jackpot
Mark Sami, vice president at consultancy firm SPR, said Microsoft's "mature hybrid cloud offering" helps to fuel growth and leaves rivals like Amazon "playing catch up".
Revenue from the company's Azure cloud computing business, which allows other companies to rent computing power from Microsoft's many data centers, once again spiked - this time up 76 percent. That figure beat the consensus analyst estimate of $10.13 billion. Analysts surveyed in advance expect Microsoft to post earnings of $0.96 per share on revenue of $27.9 billion in revenue. "That means you need to have a platform that has a community around it and monetizes well".
Money taken in by a productivity and business processes unit rose to $9.8 billion, including strong growth in cloud-based Office productivity products aimed at consumers and companies, according to Microsoft.More news: Mega Millions $1.6-billion winning lottery ticket sold in SC
Nadella says the move will increase the strength of Microsoft gaming.
The shares rose by 4 per cent to $106.50 in late trading in NY.More news: Amazon sees slower global growth, cites late Diwali sales