The Redmond, Washington-based company reported earnings of $1.51 per share and a 14% increase in revenue to $36.9 billion. Analysts were expecting the company to report earnings of $1.32 per share on revenue of $36.67 billion.
The stock gained 1.8% to $171.07 in after-hours trading Wednesday. Microsoft has been on a roll over the past 12 months, climbing more than 60% in the period.
The company said that it will provide forward-looking guidance during its earnings conference call.
“We are innovating across every layer of our differentiated technology stack and leading in key secular areas that are critical to our customers’ success,” said CEO Satya Nadella.
The company got a boost from winning the 10-year $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract from the Pentagon in late October.
The JEDI contract is a big win for Microsoft as the company beat out rival Amazon (AMZN) - Get Report and its market-leading Amazon Web Services cloud platform. Amazon's cloud market share was about 33% as of the end of the second quarter, while Microsoft's Azure held 16%.
Microsoft’s cloud business overtook productivity and business processes as the company’s second most revenue-generating segment in the quarter. Personal computing is still the company’s bread and butter, with the segment bringing in $13.2 billion in revenue in the quarter.
"Strong execution from our sales teams and partners drove Commercial Cloud revenue to $12.5 billion, up 39% year over year," said CFO Amy Hood.