San Francisco, Apr 27 (IANS): Driven by consistent growth in its Office and Cloud solutions, Microsoft has posted revenue of $26.8 billion and net income of $7.4 billion in its third quarter that ended on March 31.

The tech giant posted a 16 per cent increase in revenue and 35 per cent hike in net income from a year earlier.

"Our results this quarter reflect the trust people and organisations are placing in the Microsoft Cloud. We are innovating across key growth categories of infrastructure, AI, productivity and business applications to deliver differentiated value to customers," Microsoft CEO Satya Nadella said in a statement late Thursday.

Microsoft returned $6.3 billion to shareholders in the form of dividends and share repurchases in the third quarter of the fiscal year 2018, an increase of 37 per cent.

Office commercial products and Cloud services revenue increased 14 per cent -- driven by Office 365 commercial revenue growth of 42 per cent.

"We delivered double-digit revenue and operating income growth driven by 58 per cent growth in our commercial Cloud revenue," said Amy Hood, Executive Vice President and Chief Financial Officer at Microsoft.

The Azure cloud offering had 93 per cent revenue growth.

Revenue in Productivity and Business Processes was $9 billion and increased 17 per cent in the quarter.

Microsoft now has over 135 million active Office 365 business users, with 30.6 million Office 365 consumer users.

Surprisingly, LinkedIn revenue increased 37 per cent, with continued acceleration in engagement highlighted by LinkedIn sessions growth of over 30 per cent.

Microsoft acquired LinkedIn for $26 billion in 2016.

"Dynamics products and Cloud services revenue increased 17 per cent, driven by Dynamics 365 revenue growth of 65 per cent," the company said.

Revenue in Intelligent Cloud was $7.9 billion and increased 17 per cent.

In the devices segment, the revenue in personal computing was $9.9 billion and increased 13 per cent.

Windows commercial products and cloud services revenue increased 21 per cent. Gaming revenue increased 18 per cent driven by Xbox software.

Surface notebook revenue increased 32 per cent while Search advertising revenue excluding traffic acquisition costs increased 16 per cent, the company said.