A pandemic-fuelled triple-whammy in the final quarter of 2020 lifted Microsoft’s latest revenues and earnings far above expectations, according to figures released late on Tuesday.

A boom in PC sales, surging demand for video gaming, and increased usage of its cloud services combined to produce a 17 per cent surge in revenue, to $43.1bn.

The jump came at a time when Wall Street had been expecting the US software company’s growth rate to slow to below 10 per cent, and brought a 6 per cent bounce in its shares in after-market trading. The jump in demand from customers working, learning and playing from home was strong enough to overcome the headwinds from a weak economy.

Microsoft reported earnings per share of $2.03, up from $1.51 the year before. Wall Street had been expecting revenue of $40.2bn and earnings per share of $1.64.

In a statement, Satya Nadella, chief executive, heralded the jump in demand since the Covid-19 crisis began as “the dawn of a second wave of digital transformation sweeping every company and every industry”.

Microsoft had been expected to end 2020 with revenue growth decelerating from the preceding quarter’s 12 per cent. Though PC sales have been strong — lifting Intel’s latest earnings well above expectations last week — Microsoft faced a tough comparison with the final months of 2019, when demand for Windows was boosted by the end of support for Windows 7.

However, revenues from sales of Windows to computer makers defied expectations by actually rising 1 per cent in the quarter. At the same time, sales of new Xbox game consoles boosted gaming revenue by 40 per cent. That lifted overall revenue from the company’s More Personal Computing division by 14 per cent, to $15.1bn.

The biggest jump in the quarter came from Microsoft’s Intelligent Cloud division, which includes its Azure cloud platform as well as server software. Azure’s revenue growth rate rose slightly to 48 per cent, adjusting for currency movements. That lifted the division’s overall revenue by 23 per cent, to $14.6bn.

Meanwhile, the Productivity and Business Processes division reported revenue of $13.4bn, up 13 per cent, led by continued strong demand for Office 365, which grew 20 per cent adjusted for currency movement, in line with the previous quarter.

Line chart of Share price ($) showing Microsoft shares hit an all-time high on Tuesday