Microsoft intelligent cloud revenue increased 5% y/y as reported and 11% in constant currency to $6.34 billion, ahead of consensus of $6.29 billion.
On-premise server products increased 5% y/y and were driven primarily by premium versions of SQL Server, Windows Server and System Center, and were partially offset by weakness in non-annuity workloads, specifically transactional Windows Server workloads.
Azure revenue grew 140% y/y in cc, while compute usage nearly doubled y/y and SQL database usage more quintupled over the prior year. We continue to believe that Microsoft is one of the best positioned vendors to capture meaningful market and mind share in the cloud, evidenced by the strong growth in revenue, usage, and also improved scale.
