Microsoft credits cloud and hardware growth for record first-quarter revenue

Microsoft has posted record first-quarter revenue, which it says is thanks to its cloud strength and hardware progress.

The company announced its results for the quarter ended September 30 overnight, posting revenue of $US23.20 billion ($A26.5 billion). Gross margin, operating income and diluted earnings per share were $14.93 billion, $5.84 billion and $0.54 per share respectively.

It’s a better-than-expected result for Microsoft. Analysts believed the company would report $22.02 billion revenue and earnings per share of $0.49 to $0.50.

The company’s devices and consumer revenue grew 47% to $10.96 billion. That result was thanks to Surface Pro 3 momentum which drove Surface revenue of $908 million.

Total Xbox console sales were 2.4 million, growing 102%. Microsoft’s latest gaming console, the Xbox One launched in 28 new markets during the quarter.

Commercial revenue also grew 10% to $12.28 billion. Commercial cloud revenue grew by 128%, which the company says was driven by Office 365, Azure and Dynamics CRM.

Microsoft executive vice president Amy Hood says the results are a strong start to the year, with continued cloud momentum and meaningful progress across the company’s device businesses.

“We will continue to invest in high-growth opportunities and drive efficiencies across the organization to deliver long-term shareholder value,” she says.