Microsoft reports better-than-expected quarterly results

Microsoft is to use more artificial intelligence in its product.

Microsoft is to use more artificial intelligence in its product. - Credit: PA

Microsoft's shift away from hardware and into 'cloud-based services' continues to serve the technology giant well as it reported better-than-expected quarterly financial results.

Upon taking over the firm in 2014, chief executive Satya Nadella said he wanted to move Microsoft's focus away from manufacturing technology hardware, instead driving their Windows and Office software alongside its cloud server business.

The company has steadily improved since, with their latest results reporting increased revenue of $22.3bn (£18.1bn), up 3% on the same period last year. Operating income for the quarter was just over $7bn (£5.7bn) .

Mr Nadella said on reporting the results: 'We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences.

'We continue to innovate, grow engagement, and build our total addressable market.'

Chief financial officer Amy Hood added: 'Our first quarter results showed continued demand for our cloud-based services.

'We continue to invest, position ourselves for long-term growth, and execute well across our businesses.'

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Microsoft revealed the number of subscribers to their Office 365 cloud service had increased to 24 million, with revenue in that area rising 8% on the last quarter.

The firm's iPad-rivalling Surface tablet continues to perform well too, with revenue reaching $926m (£755m), up from $672m (£548m) this time last year.

Microsoft is expected to reveal a new version of the device at a live event next week.

However, revenue for Xbox - Microsoft's flagship games console - was down 5%, but the number of the users for the Xbox Live online service rose from 47 million from 39 million a year ago.