Microsoft killed it. 

Shares of Microsoft (MSFT - Get Report)  popped 4% in after-hours trading as it delivered strong cloud sales and proved to Wall Street it's morphing into a services play. 

For the quarter, the Xbox manufacturer posted adjusted earnings of 84 cents per share on revenue of $24.5 billion. Analysts polled by FactSet were projecting adjusted earnings of 72 cents per share on revenue of $23.52 billion.

For the same period a year ago, Microsoft reported adjusted earnings of 76 cents per share on revenue of $22.33 billion.

"This quarter we exceeded $20 billion in commercial cloud ARR, outpacing the goal we set just over two years ago," said Satya Nadella, chief executive officer at Microsoft. "Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform."

Shares of Microsoft have gained over 27% coming into the report. 

Microsoft has a fan in former Apple (AAPL - Get Report) CEO John Sculley. 

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