While revenue was down seven percent compared to this time a year ago, Microsoft managed to turn a $2 billion quarterly loss into a $3 billion profit, which is a solid result for the company.
More Personal Computing (including Windows, Devices, Gaming and Search): $8.9 billion in revenue, compared to $12.7 billion in the last quarter.
This segment, which includes results from server products and services (including Windows Server and Azure), grew 7 percent to $6.7 billion.
The Intelligent Cloud unit also improved by 7 percentage points, and Azure revenue increased by no less than 102 percent, so Azure usage more than doubled year-over-year. Office consumer products and cloud services were up 19%, and consumer subscribers for Office 365 hit 23.1 million.
Microsoft shares closed 4% higher in NY following the news.
Stock of the company was up 3.5% following the announcement of earnings by the company.
Revenue of $22.6 billion, up from $22.18 billion a year ago.
Microsoft has posted earnings for its 2016 fiscal fourth quarter, which is the first report of its earnings since it announced the acquisition of LinkedIn.
Under Satya Nadella, Microsoft has been transforming itself and focusing more on cloud-based services as PC shipments continue to drop.
The company is relying on the switch to recurring cloud contracts to help make up for weaker one-time corporate software purchases, which are still on course to decline but came in stronger than the company projected in the recent quarter.
Microsoft's profit was boosted this quarter by a more favorable tax rate.
The quarterly results also indicated that Microsoft Corporation made progress in its cost-cutting efforts and in its plans to make up for its falling phone business. Earnings, adjusted for non-recurring costs and asset impairment costs, were 69 cents per share.
For the year, revenue from the reporting segment that includes Windows and mobile phones fell 6.3% to $40.46 billion.
If Amazon has been the undisputed king of the cloud, analysts say Microsoft, Google and a few other tech giants are emerging as rivals.
Microsoft closed out its fiscal year on June 30, with $92 billion in revenue (non-GAAP) and $22.3 billion in net income.