Microsoft beats expectations with $22b revenue

Microsoft CEO Satya Nadella said the past year had been pivotal in the company's transformation. Photo / AP

Microsoft has beat industry expectations by reporting revenue of more than US$22.6 billion for the fourth quarter of its 2016 financial year as the technology firm's cloud services continue to be popular with businesses and consumers.

Analysts had expected revenue to be around $22.1 billion, close to the figure for the same period last year.

But a 19 per cent rise in the company's Office products and cloud services for consumers - which includes familiar software such as Microsoft Word - enabled it to report better-than-expected results.

Microsoft also revealed that Office 365 subscriptions had risen to 23.1 million.

Chief executive Satya Nadella said of the figures: "This past year was pivotal in both our own transformation and in partnering with our customers who are navigating their own digital transformations.

"The Microsoft Cloud is seeing significant customer momentum and we're well positioned to reach new opportunities in the year ahead."

The latest results continue a trend of refocusing Microsoft's efforts on its services rather than hardware such as smartphones, a trend introduction when Nadella became chief executive in 2014.

The latest results revealed the company's phone business revenue had declined by 70 per cent, with no new Windows Mobile smartphone yet in sight.

However, the company's tablet and hybrid laptop business was up 9 per cent on the previous quarter, as the Surface Pro 4 and Surface Book continue to sell well.

Xbox Live, Microsoft's online subscription service for its Xbox 360 and Xbox One video games consoles, also reported a 33 per cent increase in monthly active users over the last year, reaching 49 million.

-AAP