Citing evolving macroeconomic conditions and other unforeseen items, Microsoft reported revenue and earnings below its previously-provided financial guidance.
Revenue was $51.9 billion, an increase of 12% (up 16% in constant currency). Operating income was $20.5 billion and increased 8% (up 14% in constant currency). Net income was $16.7 billion and increased 2% (up 7% in constant currency). Diluted earnings per share was $2.23 and increased 3% (up 8% in constant currency)
“We see real opportunity to help every customer in every industry use digital technology to overcome today’s challenges and emerge stronger,” said Satya Nadella, chairman and chief executive officer of Microsoft. “No company is better positioned than Microsoft to help organizations deliver on their digital imperative – so they can do more with less.”
“In a dynamic environment we saw strong demand, took share, and increased customer commitment to our cloud platform. Commercial bookings grew 25% and Microsoft Cloud revenue was $25 billion, up 28% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “As we begin a new fiscal year, we remain committed to balancing operational discipline with continued investments in key strategic areas to drive future growth.”
Unfavorable items included:
Unfavorable foreign exchange rate movement within the quarter negatively impacted revenue and diluted earnings per share $(595) million and $(0.04), respectively.
Extended production shutdowns in China that continued through May and a deteriorating PC market in June contributed to a negative impact on Windows OEM revenue of over $(300) million
Reductions in advertising spend contributed to a negative impact on LinkedIn as well as Search and news advertising revenue of over $(100) million
Employee severance costs.
Some business highlights for the quarter:
Revenue in Productivity and Business Processes was $16.6 billion and increased 13% (up 17% in constant currency), with the following business highlights:
- Office Commercial products and cloud services revenue increased 9% (up 13% in constant currency) driven by Office 365 Commercial revenue growth of 15% (up 19% in constant currency)
- Office Consumer products and cloud services revenue increased 9% (up 12% in constant currency) and Microsoft 365 Consumer subscribers grew to 59.7 million
- LinkedIn revenue increased 26% (up 29% in constant currency)
- Dynamics products and cloud services revenue increased 19% (up 24% in constant currency) driven by Dynamics 365 revenue growth of 31% (up 36% in constant currency)
Revenue in Intelligent Cloud was $20.9 billion and increased 20% (up 25% in constant currency), with the following business highlights:
- Server products and cloud services revenue increased 22% (up 26% in constant currency) driven by Azure and other cloud services revenue growth of 40% (up 46% in constant currency)
Revenue in More Personal Computing was $14.4 billion and increased 2% (up 5% in constant currency), with the following business highlights:
- Windows OEM revenue decreased 2%
- Windows Commercial products and cloud services revenue increased 6% (up 12% in constant currency)
- Xbox content and services revenue decreased 6% (down 4% in constant currency)
- Search and news advertising revenue excluding traffic acquisition costs increased 18% (up 21% in constant currency)
- Surface revenue increased 10% (up 15% in constant currency)
https://www.microsoft.com/en-us/investor/earnings/fy-2022-q4/press-release-webcast
