Microsoft reported adjusted revenue and profit above estimates on Thursday, driven by growing demand for its cloud products and services.
Microsoft's shares (msft)were up 5.2% at $60.21 in extended trading.
Revenue from the company's increasingly important "Intelligent Cloud" business, which includes the Azure cloud platform and server software, rose 8.3% to $6.38 billion.
This beat analysts' average estimate of $6.27 billion, according to research firm FactSet StreetAccount.
Under CEO Satya Nadella, Microsoft has been focusing on cloud services and mobile applications as growth slows in its traditional software business.
Nadella orchestrated Microsoft's biggest-ever deal, reaching an agreement in June to buy LinkedIn for $26.2 billion.
Revenue in the unit that includes Windows software and the company's struggling mobile business fell 1.8% to $9.29 billion.
Worldwide PC shipments fell 3.9% in the quarter ended Sept. 30, according to research firm IDC, much less than the 7.1% it had previously estimated.
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Net income fell to $4.69 billion, or 60 cents per share, from $4.90 billion, or 61 cents per share, a year earlier. (http://bit.ly/2eW79l4)
Excluding items, Microsoft earned 76 cents per share, beating analysts' average estimate of 68 cents, according to Thomson Reuters I/B/E/S.
On an adjusted basis, Microsoft reported revenue of $22.33 billion, above the average estimate of $21.71 billion.