Microsoft is changing its business. The question has been whether it’s changing fast enough. The tech giant showed some progress Thursday, reporting better-than-expected quarterly earnings and more growth in its relatively new cloud computing segment. CEO Satya Nadella has been investing in new services and redesigning Microsoft’s most popular programmes for smartphones and other mobile gadgets. But a continuing slump in the PC industry has caused Microsoft’s stock to tumble in recent months, marking the end of a honeymoon period in which shares rose steadily after Nadella took the reins in February 2014. Microsoft’s latest report shows another decline in profit and in revenue from the company’s flagship Windows software for personal computers. Wall Street analysts say 2015 is the year when Nadella needs to show his strategy is making a difference. “He needs to not just talk the talk, but walk the walk,” said FBR Capital Markets analyst Daniel Ives, who’s been a fan of Nadella’s moves to overhaul a company best known for its personal computer software. Microsoft’s financial results underscore the importance of those efforts. Revenue from cloud computing has grown rapidly, as more businesses are paying to use software housed in Microsoft’s data centres. The Redmond, Washington-based company says it’s on track to log more than US$6 billion in cloud sales in 2015. But the numbers show Microsoft still relies heavily on selling traditional software, which contributed the largest part of its $21.73 billion in sales for the quarter. The company saw a 26 per cent drop in Windows licensing revenue for consumer PCs and a 19 per cent drop in licensing for business PCs. And many analysts believe that trend will continue. Worldwide demand for PCs are expected to fall in 2015, for the fourth consecutive year, according to International Data Corp. After peaking at US$50.05 last November, Microsoft Corp. shares have traded below $43 recently. The stock closed Thursday at $43.34 and rose more than 3 per cent in late trading after the earnings report. Microsoft is hoping for a boost later this year, when it releases a redesigned version of Windows with new features for PCs and mobile devices.