Microsoft saw revenue rise to more than $24.5bn in the last quarter, an increase of 12% on the same period last year, the technology giant said.
The Windows software developer also reported a 16% jump in net income to $6.6bn as the firm's cloud computing services continue to grow.
Since taking over as chief executive in 2014, Satya Nadella has moved the industry giant away from smartphones to focus on software and services such as its Office 365 subscription service - an area of the company that grew by 12% in the latest financial results.
"This quarter we exceeded $20bn in commercial cloud ARR, outpacing the goal we set just over two years ago," Mr Nadella said.
"Our results reflect accelerating innovation and increased usage and engagement across our businesses as customers continue to choose Microsoft to help them transform."
Chief financial officer Amy Hood added: "Our strong start to the fiscal year reflects the impact of our continued investment in product innovation and sales capacity to capture expanding market opportunities."
Microsoft also reported an increase in revenue for its Surface hardware division, which the company said was driven by the launch of its new Surface laptop earlier this year.
The firm's flagship video games system, Xbox, also reported a slight revenue increase of 1%.
The new flagship console, the Xbox One X, which has been dubbed the "world's most powerful console", goes on sale next month.