By Salvador Rodriguez and Vibhuti Sharma
The company's flagship Azure cloud product recorded revenue growth of 89 percent in the fourth quarter ended June 30. Its shares were up slightly in after-hours trading.
Much of Microsoft's recent growth has been fuelled by its cloud computing business, which has benefited from companies rushing to shift their workloads to the cloud to cut data storage and software costs.
"The combination of the cloud, which is a megatrend that's going to last for years to come, and the execution, this is company that knows how to sell and be innovative - it's hard to argue with anything here," said Tom Taulli, InvestorPlace.com analyst.
Azure has a 16 percent share of the global cloud infrastructure market, making it the second-biggest provider of cloud services after Amazon.com Inc's
Revenue at Microsoft's productivity and business processes unit, which includes Office 365, rose 13.1 percent to $9.67 billion, topping analysts' average expectation of $9.65 billion, according to Thomson Reuters I/B/E/S.
"This was another gem of a quarter from Microsoft as Nadella's cloud vision is coming to fruit on the heels of massive Azure growth and secular tailwinds," said Daniel Ives at research firm GBH Insights.
Overall, the Redmond, Washington-based software company's revenue rose 17.5 percent to $30.09 billion, above expectations of $29.21 billion.
Net income rose to $8.87 billion, or $1.14 per share, from $8.07 billion, or $1.03 per share, in the year-ago fourth quarter.
Excluding certain items, Microsoft earned $1.13 per share, while analysts had expected $1.08.
(Reporting by Vibhuti Sharma in Bengaluru and Salvador Rodriguez in San Francisco; Editing by Anil D'Silva and Richard Chang)
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