Sharp growth in its commercial cloud computing business helped lift Microsoft's quarterly revenue above Wall Street's expectations.
The new and growing cloud business - essentially selling computing services and storage in its data centres to corporate customers - is one of the priorities for chief executive Satya Nadella.
He took the helm of the world's largest software company in early 2014.
Nadella has refocused the company on cloud and mobile in the face of stagnation in its traditional PC-based Windows business.
Microsoft's revenue in what it calls its "intelligent cloud" businesses, which includes its Azure cloud platform and server software, rose 7% to $6.7 billion.
Revenue for Azure - which customers can use to host their website, apps or data - grew 102%, but Microsoft did not say what the actual revenue figure was.
That makes an annual "run rate" of $12.1 billion for cloud-related revenue, up sharply from over $8 billion a year ago.
Microsoft calculates run rate by multiplying revenue in the final month of the quarter for its cloud businesses by 12.
Despite the surge in revenue, Microsoft is still struggling to increase profit in the capital-intensive cloud business. It said operating profit in its intelligent cloud businesses fell 17% to $2.19 billion in the quarter.
Microsoft said the drop was mainly due to higher research, development, sales and marketing costs, as it makes investments and acquisitions to "drive cloud sales capacity and innovation."
Overall, Microsoft posted revenue for its fiscal fourth quarter ended June 30, adjusted for some one-time items, of $22.6 billion, up 2% from a year ago. That beat Wall Street's average forecast of $22.1 billion.
It reported net income of $3.1 billion, or 39 cents per share, compared with a loss of $3.2 billion, or 40 cents per share, a year earlier.
It had taken a $7.5 billion charge to write down the value of its purchase of Nokia's handset business this time last year.
Excluding one-time items in the latest quarter, Microsoft reported earnings of 69 cents per share. That was ahead of analysts' average forecast of 58 cents.
Analysts said that Microsoft was finally making headway shifting Microsoft Office software clients onto subscription-based cloud services.
Office consumer products and cloud services were up 19% and Office 365 increased subscribers to 23.1 million during the quarter.
Nadella, who announced the company's largest-ever deal last month, striking a deal to pay $26.2 billion for LinkedIn, has staked Microsoft's future on mobile and the cloud.
So far his plan has been well received by investors. Microsoft shares are up 64% since his predecessor as CEO Steve Ballmer announced his plan to retire, in August 2013.