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Even as one of Microsoft's (MSFT) - Get Microsoft Corporation (MSFT) Report cloud businesses saw growth slow a bit last quarter, others were quite ready to pick up the slack.

The software giant's shares are up over 6% on Thursday after it reported September quarter (fiscal first quarter) revenue of $29.08 billion (up 19% annually) and GAAP EPS of $1.14 (up 36%), topping consensus analyst estimates of $27.89 billion and $0.94. While Microsoft has a history of issuing conservative guidance and later beating it, the magnitude of this beat was clearly better than markets expected.

On its earnings call, Microsoft guided for its three reporting segments to collectively post December quarter revenue of $31.9 billion to $32.7 billion. At a $32.3 billion midpoint, that represents 12% annual growth and is slightly above a $32.2 billion consensus.

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In spite of the tech correction, Microsoft's stock is now up 27% on the year, and 38% over the last 12 months. Here are some takeaways from the company's earnings report and call.

1. Office and Dynamics Growth Improved Markedly

After slowing in the June quarter due to a sales mix shift towards subscriptions relative to up-front license payments, revenue growth for Microsoft's Office productivity suite and Dynamics business apps accelerated last quarter. Office commercial revenue growth improved to 17% from 10%, and Office consumer growth to 16% from 8%. Dynamics growth improved to 20% from 11%, with the help of 51% growth for the Dynamics 365 cloud apps.

Office 365 commercial seats grew by 29% annually, and Office 365 consumer subscriptions by 800,000 sequentially and 4.4 million annually to 31.4 million. On the call, CFO Amy Hood once more noted that adoption of Microsoft's costlier E3 and E5 enterprise Office 365 plans is boosting average revenue per user (ARPU), and that the recent launch of Office 2019 featured a price increase.

Many of Microsoft's businesses saw double-digit sales growth last quarter. Source: Microsoft.

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2. Azure Growth Slowed a Little

The law of large numbers may have caught up a bit with Microsoft's cloud services platform: Annual Azure growth slowed to 76% from the June quarter's 89%. However, that's still well above the 49% growth posted in Q2 by Amazon Web Services (AWS), which itself is taking public cloud share from various smaller rivals.

Hood added on the call that Microsoft's commercial bookings, which grew 15% annually, benefited from "larger long-term Azure contracts, growth in Azure consumption overages and pay-as-you-go contracts." CEO Satya Nadella, meanwhile, argued once more that Azure's hybrid cloud strengths and ability to integrate with on-premise Microsoft products such as the Windows Server OS and the SQL Server database remain big strengths.

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3. Windows Is Doing Reasonably Well

Microsoft's "Windows OEM" revenue, which covers licenses related to PC sales, saw growth slow to 3% from the June quarter's 7%. However, that's still a little better than the PC industry's unit growth. The company's Windows commercial products and services revenue, which continues to benefit from strong multi-year deal activity, grew 12%.

Healthy business PC demand is boosting Microsoft's Windows sales -- particularly since business Windows licenses feature a higher ARPU than consumer licenses. Demand for Microsoft 365 subscriptions, which bundle access to Windows, Office 365 and security and mobile management offerings, also seems to be helping.

4. Other Businesses Mostly Look Healthy

The gaming segment was once more a standout: Its revenue rose 44% with the help of a 36% increase in Xbox software and services revenue. Hood said "continued strength from a third-party title" (Fortnite?) contribute to the software/services growth.

LinkedIn revenue rose 33%, after having grown 37% in the June quarter. Surface revenue rose 14% to $1.18 billion, and Microsoft forecast growth for its PC line would accelerate this quarter as a product refresh makes itself felt. Search ad revenue rose 17%.

And though this business is being hurt some by adoption of Azure's public cloud services, Microsoft's server products revenue rose 10%. Hood indicated that demand for hybrid cloud solutions and "premium versions" of Microsoft's server offerings are boosting sales, and that some products will see price increases this quarter. Windows Server 2019 was just made generally available, and a preview version of SQL Server 2019, which adds new big data/analytics features, arrived last month.

5. Cloud Margins Are Still Improving

After having risen by six percentage points annually in the June quarter to 58%, Microsoft's "commercial cloud" gross margin (GM) rose four points last quarter to 62%. Hood said this was driven by "significant improvement" in the company's Azure gross margin.

Microsoft still expects its commercial cloud GM to rise in fiscal 2019 (it ends in June 2019), albeit at "a more moderated rate" than in prior years. Thanks largely to the cost of supporting the cloud data centers, Microsoft's cloud software and services margins will probably never match the margins it sees for traditional software sales. However, the difference might not be as large as once feared.

6. Spending Growth Remains Under Control

Operating expenses rose 8% annually in the September quarter -- that's well below revenue growth of 19% -- after having grown by 9% in the June quarter. For the whole of fiscal 2019, opex is expected to rise 8%, with the recent GitHub acquisition adding one percentage point to that figure.

Capital spending, which can fluctuate a lot from quarter to quarter, rose to $4.3 billion from the year-ago period's $2.7 billion. However, Microsoft expects capex to be flat in the December quarter, and reiterates guidance for fiscal 2019's capex growth to be lower than fiscal 2018's.

7. Buybacks Increased

Boosting EPS a bit: The "common stock repurchased" line item on Microsoft's cash-flow statement was $3.7 billion during the quarter. That's up from the June quarter's $2.4 billion and the year-ago period's $2.6 billion.

With Microsoft throwing off tons of free cash flow and possessing close to $60 billion in net cash (cash minus debt) at the end of June, odds are good that the company will keep buying back stock at a healthy clip.