"In gaming, we are pursuing our expansive opportunity - from the way games are created and distributed to how they are played and viewed, surpassing $10 billion in revenue this year for the first time", Microsoft CEO Satya Nadella said on a call with investors Thursday. Intelligent Cloud's operating margins. The mass use and adoption of their Azure Cloud storage have been credited with being the major factor in this stark rise in revenue. Microsoft reported that Office commercial products and cloud services revenue increased 10% (up 8% in constant currency) mainly driven by strong Office 365 commercial revenue growth of 38% (up 35% in constant currency).
"Our hybrid value proposition has continued to resonate, so there are a bunch of workloads that are migrating to the cloud", the Microsoft boss said.
Wall Street wasted no time in reacting with Microsoft shares hitting all time highs this morning opening at $108 before settling to about $106 in afternoon trading, a roughly 2% gain for the day. Surface sales crossed $4.6 billion in FY18, while Windows Pro revenues rose by 14 percent. The sudden spike of growth in the fourth quarter which led to the record-breaking full-year results can be traced to two key business divisions: The Azure cloud computing platform, which grew 89 percent, and gaming, which grew 39 percent - a sign that the company's poor start for the Xbox One platform is finally behind it. Together with Windows Cloud, it has raked in revenues to the tune of $23 billion. Microsoft's Surface business also saw significant growth for the quarter, posting a 25 percent gain over the same time a year ago.
Microsoft posts bumper Q4, with Windows, Surface, Azure all up
Microsoft also reported strong growth from other areas of its business, including social networking, gaming, and hardware. Notably, this is Microsoft's first earnings report since announcing its intent to acquire code-sharing startup GitHub for $7.5 billion.
Nadella said Office 365 has more than 135 million users, and that a mobile version of Outlook is used on more than 100 million devices powered by Android or Apple software.
Its popular Surface laptop-turned-tablet range earned a 25 per cent increase in revenue, which Microsoft attributed to strong performance by its latest editions against low comparable numbers previous year.