Microsoft’s Azure revenue nearly doubled year-over-year in its second quarter


Microsoft posted a relatively good second quarter this year that continued the ongoing process of its growth into a major cloud entity, in addition to saying it would be taking a significant charge as part of changes to U.S. tax law.

In particular, Microsoft said that its Azure revenue grew 98% year-over-year — a long-running theme alongside many other lines that equate to Microsoft’s efforts in the cloud offsetting many of the major shifts in computing that first led Microsoft to be a behemoth. The company said it would be taking a $13.8 billion charge related to the changes in tax laws. All this, together with earnings that just about beat what Wall Street was looking for, led to a collective shrug for investors as the stock basically went nowhere.

Since Nadella has taken over, much of the narrative has shifted to the transition of Microsoft to a true player in cloud computing. As Amazon’s Web Services continues to become a behemoth and Google makes its own play, Microsoft too has found itself diving deep into the cloud and going head-to-head with Google and Amazon to try and woo as many developers as possible.

So far, that’s more or less paid off. As more and more companies start to find value in using up computing resources on-demand rather than investing heavily in their own hardware, Microsoft has ridden that wave along with others to build out a massive business. In October, the company said it exceeded the $20 billion ARR for its commercial cloud target it set about two years ago. Under Nadella, Microsoft’s stock has more than doubled:

In addition, Microsoft saw some continuing growth from some of its other services including LinkedIn. That alone contributed about $1.3 billion in revenue to Microsoft, while its overall division (called Productivity and Business Processes) including LinkedIn and Office commercial products grew around 25% year-over-year this quarter to $9 billion in revenue.

Here’s the final scorecard for the company:

  • Q2 earnings: 96 cents per share, compared to Wall Street targets of 86 cents per share.
  • Q2 revenue: $28.92 billion, compared to Wall Street’s expectation of $28.4 billion in revenue.
  • Commercial Cloud revenue: $5.3 billion, up 56% year-over-year
  • Intelligent Cloud revenue (includes Azure): $7.8 billion
  • Azure revenue growth: 98%

Featured Image: Stephen Brashear/Getty Images


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