(Reuters) – Microsoft Corp beat Wall Street estimates for quarterly revenue on Tuesday, powered by growth in its flagship cloud computing business as the software giant continued to benefit from a global shift to work and learning from home.
The shift to work from home has accelerated adoption of cloud-based computing, benefiting companies such as Microsoft, Amazon.com Inc’s cloud unit and Alphabet Inc’s Google Cloud.
Microsoft said revenue in its “Intelligent Cloud” segment rose 20% to $13 billion in the first quarter, with 48% growth in Azure. Analysts had expected revenue of $12.7 billion, according to IBES data from Refinitiv.
The value of Microsoft’s future recurring revenue contracts for commercial cloud customers held steady at $107 billion from the previous quarter and its proportion of one-time deals rose slightly. Investors often prefer recurring revenue contracts because they are more predictable over time.
Revenue from its personal computing division, which includes Windows software and Xbox gaming consoles, rose 6% to $11.8 billion.
The company’s revenue rose 12% to $37.2 billion in the quarter ended Sept. 30, beating analysts’ estimates of $35.72 billion.
Net income rose to $13.89 billion, or $1.82 per share, from $10.68 billion, or $1.38 per share, a year earlier. Analysts had expected a profit of $1.54 per share.
The software company’s shares rose 1% to $215.40 in extended trading.