Microsoft’s second quarter 2018 results came out with some pleasant surprises for the financial analysts.

Both earnings per share and overall revenue beat market predictions. No wonder MSFT stock price went up 4 percent after the results went public.

Office commercial products and cloud services revenue increased 10% mostly driven by Office 365 commercial revenue growth of 38%.  Microsoft is losing some sales of on-site software (Windows Server, Exchange Server etc) but more than making up for it with sales of their replacement cloud services.

Office consumer products and cloud services revenue increased 8%

Office 365 consumer subscribers increased to 31.4 million, a 2.6% increase from last quarter.

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Overall, Microsoft’s strategy of downplaying and degrading software sales in favor of regular fees for services is working.  Consumers and commercial customers are moving to Office 365 plans and Microsoft cloud services.

Azure cloud services improved dramatically.  Microsoft didn’t give hard numbers but said Azure revenue went up a whopping 89%.

If you’re interested or having trouble sleeping, read their Q2 2018 disclosure.

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