Microsoft hits its $20 billion annual run rate goal for commercial cloud in strong Q1

Microsoft hits the mark on its commercial cloud goal set back in 2015.

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Microsoft hit its $20 billion commercial cloud annual revenue run rate target and delivered better-than-expected first quarter results.

The commercial cloud target was set its $20 billion annual run rate goal in April 2015. For those keeping score at home, Microsoft's commercial cloud rollup includes Azure; Office 365 business services (Exchange Online, SharePoint Online, Skype for Business Online, Microsoft Teams); Dynamics 365; and its Enterprise Mobility + Security Suite (EMS).

Microsoft also started disclosing commercial cloud revenue by quarter.

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Overall, Microsoft reported first quarter net income of $6.6 billion, or 84 cents a share, on revenue of $24.5 billion, up 12 percent from a year ago.

Wall Street was expecting Microsoft to report first quarter earnings of 72 cents a share on revenue of $23.56 billion.

Here's a look at what Microsoft products drove growth.

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By the numbers:

  • Productivity and business processes revenue was $8.2 billion, up 28 percent. The results were driven by Office 365 commercial revenue as well as Dynamics 365.
  • LinkedIn revenue was $1.1 billion in the quarter.
  • Server products and cloud services revenue was up 17 percent in the first quarter.
  • Azure revenue growth was 90 percent in the third quarter.
  • Surface revenue was up 12 percent due to sales of the latest Surface Laptop.
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