Microsoft again cites strong cloud growth in its latest earnings

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Credit: Jonathan Vanian / Gigaom

As has become its custom, Microsoft claimed strong cloud momentum for its first quarter of fiscal year 2015.

The company’s commercial cloud business, which includes Office 365, Azure and Dynamics CRM, saw revenue up 128 percent year over year to about $1.18 billion, according to Microsoft.

Cloud is a growth area, but it also tends to be less profitable up front than the big enterprise-y software sales of the last decade.  In the cloud era, customers tend to pay or rent applications in a subscription model stretched over time, whereas in the past they’d pay a big upfront charge for the software running on their PCs and servers. Microsoft’s cash cow Office franchise has seen price erosion forced in part by Google Apps and other competitors, for example.

Overall Microsoft posted earnings per share of $0.54 down 13 percent year over year, but also beating estimates of $0.49. The company logged revenue of $23.20 billion,  up 25 percent year over year and beating projections of $22.02 billion.

microsoft q3

This story will be updated during the Microsoft earnings call slated for 2:30 PST.

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