Software giant Microsoft (NASDAQ:MSFT) reported its second quarter of fiscal 2019 earnings results on Jan. 30, turning in earnings per share of $1.10 and revenue of $32.47 billion, good for year-over-year growth of 12.3% and 14.6%, respectively. Pretty good numbers for a company as large and established as Microsoft. The company also called for revenue to fall in the range of $29.4 billion and $30.1 billion, nearly hitting the consensus of $29.83 billion at the midpoint of the range. 

Although those distilled numbers tell us that Microsoft's business keeps marching in the right direction, it's worth looking at some of management's commentary on the most recent earnings call to get a better sense of how the business is performing.

Microsoft's logo.

Image source: Microsoft.

1. Let's talk gaming

Microsoft's gaming revenue was up 8% year over year during the second quarter, with revenue from Xbox software and services rising 31% over that same period. Although the gaming business grew more slowly than the overall business did in the quarter, this is still a pretty solid result, especially considering the company, as well as the industry overall, is in the final innings of the current game console cycle. 

During the call, Microsoft CEO Satya Nadella provided some useful qualitative insights, saying the company enjoyed "record user engagement and record average revenue per user." 

He also talked about the company's investments in its future content, highlighting the fact that the company snapped up two game studios during the second quarter, which he said brings "the total to 13 and more than doubling our first-party content capacity in the past six months."

Having the capability to build compelling first-party titles in-house is important for game console makers like Microsoft, since such titles tend to be exclusive to their platforms. If a game console maker offers must-have titles that gamers can only get on that company's console, that could obviously drive sales of that platform. Not only can that net the console maker the upfront revenue associated with the console purchase as well as the title purchase, but it can also get players hooked into the ecosystem, which can involve sales of things such as online gaming subscriptions -- in Microsoft's case, that's Xbox Live -- and additional first-party titles down the road.

A data point that seems to indicate that Microsoft's long-term strategy is playing out: According to Nadella, "Xbox Live monthly active users reached a record 64 million, with the highest number of mobile and PC users to date."

2. A big quarter for Surface

Microsoft has been gradually expanding its Surface line of computers to include notebooks and all-in-one desktops in addition to its typical 2-in-1 laptop/tablet hybrids. Microsoft is even broadening its Surface portfolio to include accessories, including Surface Headphones

Nadella said the Surface business "had its biggest quarter ever this holiday, delivering strong double-digit growth in both consumer and commercial."

For those looking for hard numbers, CFO Amy Hood revealed that Surface sales popped 39% year over year during the quarter, hitting $1.9 billion. That figure, Hood said, was "ahead of our expectations, driven by strong growth across both our consumer and commercial segments."

It's clear that the Surface business continues to thrive. 

3. Eye-popping cloud growth

Microsoft's Azure Cloud has emerged as one of the market's leading cloud computing platforms. The company's momentum in the cloud continued last quarter, with Nadella explaining that Microsoft's total commercial cloud revenue was up 48% year over year, "anchored by Azure revenue growth of 76%." 

Check out the latest Microsoft earnings call transcript.

The company's revenue from its intelligent cloud business unit -- which incorporates, among other things, Microsoft's Azure results -- rose 20% year over year, making it the fastest-growing of the software giant's three major business segments. 

During the call, Nadella highlighted several markets in which the company's Azure platform is gaining traction, such as the retail, financial services, and healthcare segments. He also said the company is "accelerating [its] innovation in emerging workloads, like IoT [Internet of Things] and edge AI [artificial intelligence]," and he highlighted that at January's Consumer Electronics Show, Microsoft's "partners showcased how Azure IoT and Azure AI are enabling them to build new connected devices and experiences that span the cloud and the edge from connected homes to cars to smart cities."

Microsoft's moving

For those who endured Microsoft's long period of stagnation in past years, it's been good to see Nadella's initiatives bring so much success. With positive momentum, Microsoft has a lot of promise for the future.