Microsoft reported very high quarterly sales fueled by persistent demand from corporate customers seeking to shift computing tasks to cloud-based systems.

The company announced the following results for the quarter ended December 31, 2019, as compared to the corresponding period of last fiscal year:

• Revenue was $36.9 billion and increased 14%
• Operating income was $13.9 billion and increased 35%
• Net income was $11.6 billion and increased 38% GAAP and 36% non-GAAP
• Diluted earnings per share was $1.51 and increased 40% GAAP and 37% non-GAAP

Chief Executive Officer Satya Nadella has been trying to narrow the gap in cloud infrastructure with market leader Amazon.com Inc. Microsoft’s recent wins include a massive contract with the Pentagon, for which it beat out front-runner Amazon, and a cloud deal with accounting giant KPMG LLP. Microsoft is also pulling in more revenue from Office 365. Azure revenue in the recent period rose 62% and Office 365 sales to businesses increased 27%.

“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 Satya Nadella, chief executive officer of Microsoft. “Along with our expanding opportunity, we are working to ensure the technology we build is inclusive, trusted and creates a more sustainable world, so every person and every organization can benefit.”

“Strong execution from our sales teams and partners drove Commercial Cloud revenue to $12.5 billion, up 39% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

Revenue in Productivity and Business Processes was $11.8 billion and increased 17% (up 19% in constant currency), with the following business highlights:

• Office Commercial products and cloud services revenue increased 16% (up 18% in constant currency) driven by Office 365 Commercial revenue growth of 27% (up 30% in constant currency)
• Office Consumer products and cloud services revenue increased 19% (up 20% in constant currency) with continued growth in Office 365 Consumer subscribers to 37.2 million
• LinkedIn revenue increased 24% (up 26% in constant currency)
• Dynamics products and cloud services revenue increased 12% (up 15% in constant currency) driven by Dynamics 365 revenue growth of 42% (up 45% in constant currency)

Revenue in Intelligent Cloud was $11.9 billion and increased 27% (up 28% in constant currency), with the following business highlights:

• Server products and cloud services revenue increased 30% (up 32% in constant currency) driven by Azure revenue growth of 62% (up 64% in constant currency)
  
• Enterprise Services revenue increased 6% (up 7% in constant currency)

Revenue in More Personal Computing was $13.2 billion and increased 2% (up 3% in constant currency), with the following business highlights:

• Windows OEM revenue increased 18% (up 18% in constant currency)
• Windows Commercial products and cloud services revenue increased 25% (up 27% in constant currency)
• Surface revenue increased 6% (up 8% in constant currency)
• Search advertising revenue excluding traffic acquisition costs increased 6% (up 7% in constant currency)
• Xbox content and services revenue decreased 11% (down 9% in constant currency)