The quarter was the 10th in a row of more than 90 percent revenue growth for its flagship Azure cloud computing service, which directly competes with Amazon Web Services.
Since Chief Executive Satya Nadella took the helm in 2014, Microsoft’s cloud business - which includes products such as Office 365, Dynamic 365 and Azure - has emerged as a significant growth area.
Revenue from what Microsoft calls its intelligent cloud segment rose 15.3 percent to $7.8 billion in the company’s fiscal second quarter, including 98 percent growth for Azure. Analysts on average had expected $7.51 billion, according to Thomson Reuters I/B/E/S.
Amazon Web Services is the leader of the $14.4 billion cloud computing market with more than 31.8 percent market share, but Azure has been growing fast and holds the No. 2 position with 13.9 percent of the market, according to 2017 third-quarter estimates by research firm Canalys.
Microsoft’s tax charge lead to a net loss of $6.30 billion in the quarter ended Dec. 31, compared to a profit of $6.27 billion, or 80 cents per share, a year earlier.
Excluding one-time items it earned 96 cents per share, beating analysts’ average expectation of 86 cents.
Many US companies have taken substantial one-time charges this quarter to account for changes to the tax law made in December, which cut the overall corporate rate and offered a lowered rate for companies repatriating overseas profits to the United States.
Besides Azure, Microsoft’s other businesses also grew. Revenue from its productivity and business unit, which includes the Office 365 service, was up 24.7 percent to $8.95 billion. Revenue at Microsoft’s “more personal computing” unit, which includes Windows, Xbox and Surface, rose 2.36 percent to $12.17 billion.
Overall revenue climbed 12 percent to $28.92 billion, beating analysts’ expectations of $28.40 billion.