The outlook soothed concerns about growth from the results of the holiday quarter, and shares erased earlier after-hours losses, trading 3% above the closing price.
Investors were seeking assurances that the enterprise cloud business is still growing strongly and will also scrutinize upcoming financial reports from Microsoft rivals Amazon.com Inc and Alphabet Inc's Google.
Executives forecast Intelligent Cloud revenue of $18.75 billion-$19 billion, compared with a Wall Street consensus of $18.15 billion, according to Refinitiv data. That would be driven by "strong growth" in its Azure platform.
Microsoft's More Computing unit would have revenue of $14.15 billion-14.45 billion, ahead of the Wall Street target of $13.88 billion, and Productivity and Business Processes of $15.6 billion-$15.85 billion compared with the consensus target of $15.72 billion.
Full-year operating margins would be up slightly from the previous year.
Total Microsoft revenue for the second quarter beat expectations but the outperformance did not flow through to the Azure cloud service. Azure revenue growth of 46% was in line with analyst expectations as compiled by Visible Alpha, but demonstrated a steady drop from fiscal 2020 when growth was in the 60% range.
Microsoft has become one of the most valuable companies in the world by betting heavily on corporate software and services, especially its cloud services and the movement to the Web of its Outlook email and calendar software, known as Office 365.
The switch to working and learning from home during the pandemic also attracted more users to Microsoft's office communication software and services such as Teams and Office 365. And demand for cloud services from Microsoft and rivals Amazon.com and Alphabet surged as the pandemic outbreak accelerated a shift online.
Revenue from Microsoft's biggest segment, which offers cloud services and includes Azure, its flagship cloud offering, rose 26%, while the business that houses its Office 365 services increased 19% in the quarter.
Net income rose to $18.77 billion, or $2.48 per share, from $15.46 billion, or $2.03 per share, a year earlier.
The company said revenue rose to $51.73 billion in the three months ended Dec. 31, from $43.08 billion a year earlier.
Analysts on average had expected revenue of $50.88 billion, according to Refinitiv data.
Investors are also focused on Microsoft's proposed $69 billion acquisition of Activision Blizzard Inc, announced on Jan. 18 read more , a huge expansion for its gaming division. It also broadens the company's efforts in the so-called metaverse, or the merging of online and offline worlds, which will have corporate and consumer applications.
Microsoft said the Activision Blizzard deal would help boost Xbox content and services revenue when it closes. Growth has fallen sharply from a high in the fourth quarter of fiscal 2020 when Xbox content and services grew 65%. In the past quarter, revenue rose 10%, while a year ago it rose 40% in the same quarter.
"They have a ton of great content and franchises. And that's where that revenue would eventually come in when the deal lands, for sure," said Brett Iversen, general manager, investor relations at Microsoft, referring to the Activision deal.