Microsoft shares are trading higher after the software giant reported better-than-expected quarterly results. The company showed strength across the board, getting a boost in particular from the accelerating adoption of cloud computing.

For its fiscal second quarter ended Dec. 31, Microsoft (ticker: MSFT) reported revenue of $43.1 billion, up 17% from a year ago, with profits of $2.03 a share, up 34%. That easily beat Wall Street’s consensus forecast for revenue of $40.2 billion and profits of $1.64 a share.

“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,” CEO Satya Nadella said in a statement. “Building their own digital capability is the new currency driving every organization’s resilience and growth.”

CFO Amy Hood added that “accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year.”

Microsoft’s quarterly gaming revenue topped $5 billion for the first time, driven by 86% growth in hardware revenue for the Xbox, reflecting the launch of a new generation of gaming consoles.

The company saw business accelerate from the September quarter in all three product segments, where revenue also exceeded forecasts.

Sales in the Productivity and Business Processes segment (which includes Office and LinkedIn), were $13.4 billion, up 13%, and above the guidance range of $12.75 billion to $13 billion.

For Intelligent Cloud, which includes cloud platform Azure, sales were $14.6 billion, up 21%, well above the projected range of $13.55 billion to $13.8 billion. Azure revenue was up 50%, up from 48% growth in the September quarter.

Sales in the More Personal Computing segment, which includes Windows and Surface tablets and computers, were $15.1 billion, up 14%, well above the company’s estimate of $13.2 billion to $13.6 billion. That includes a 40% increase in Xbox content and services.

Surface revenues decelerated in the quarter to 3% growth, from 37% in the September quarter; the company said the slowdown largely reflects the year-ago period timing of product launches, and that it would make sense for investors to look at Surface revenues over the course of the two quarters combined.

Microsoft said it returned $10 billion to holders in the quarter, including $6.5 billion of stock repurchases. The company ended the quarter with $132 billion in cash, equivalents and short-term investments, offset by $55 billion in long-term debt.

On a conference call with investors, CFO Hood said the company expects March quarter revenues in the productivity and business processes segment to range from $13.35 billion to $13.6 billion. Intelligent cloud revenues are expected to range from $14.7 billion to $14.95 billion. More Personal Computing revenue is expected to range from $12.3 billion to $12.7 billion. At the top of the range for each segment, revenue for the quarter would be $41.25 billion, well ahead of the Street consensus at $38.7 billion. Hood also said the company expects double-digit gains in revenue and operating profits for the full fiscal year ending in June 2021.

For its quarter ended September 30, Microsoft posted a revenue gain of 12%, to $37.2 billion, with profits of $1.82 a share.

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