Microsoft’s fiscal year ended in July and its first quarter ended in September. Now as always we are going to talk about how this quarter has been for the Redmond giant. A great quarter with many lights and some shadows that we will comment on below.
The cloud, Office and Windows the main impulses of Microsoft
The Redmond giant has published the results of its first quarter of the year 2022. From Microsoft they have indicated a revenue of 45 thousand three hundred million dollars and a net income of twenty thousand five hundred million dollars. Revenues are up 22 percent, and net income has increased by 48 percent. As we have already told you, the income base is the cloud, servers and Office this quarter.
The lights of Microsoft accounts
The Redmond giant launched Windows 11 this month despite PC sales declining in the United States. However, thanks to this update Windows OEM revenue is up 10 percent this quarter, despite what Microsoft calls “Continued PC Demand Affected by Supply Chain Constraints”.
For its part, revenue from commercial products and services in the Windows cloud has also increased by 12 percent, thanks to demand for Microsoft 365. Windows 11 just hit new devices earlier this month. For their part, Microsoft and OEMs hope to solve supply problems and that the new operating system will further boost demand for laptops and PCs.
Microsoft CEO Satya Nadella believes computers are key right now. “PCs are more critical than ever”Nadella said during the shareholders’ meeting today. “There has been a structural change in the demand for PC emerging from this pandemic.” Microsoft is also anticipating Windows OEM revenue growth during Q2.
As always, it is the growth of the cloud which has been impressive to Microsoft’s revenue, particularly as companies adapt to hybrid work. Smart cloud revenue is up 31 percent, including the growth of revenue from Azure and other cloud services 50 percent. A record of more than 20 billion profit has been reached in this area alone.
Office has also had a strong quarter, with Office cloud services and consumer products revenue up 10 percent, and Microsoft 365 consumer subscribers up 19 percent to a total of 54.1 million in total.
LinkedIn continues to grow and revenue from advertising on Microsoft’s social network has seen an increase of 61%. During the shareholders’ meeting, Microsoft CEO Satya Nadella said that LinkedIn has seen record engagement. As people increasingly turn to LinkedIn to connect, learn, grow, and get hired. In fact, confirmed hires on LinkedIn increased more than 160% year-over-year. Satya also noted that more than 15,000 business clients now use LinkedIn Learning.
Xbox maintains the good numbers
It’s been almost a year since Microsoft’s Xbox Series X and Series S consoles hit the market, and it has been steadily increasing Xbox hardware revenue in recent months. Hardware revenue is up again this quarter by 166 percent, thanks to continued demand for Xbox Series X and Series S consoles.
Amy Hood has indicated that Microsoft was “Capable of delivering more Xbox Series X and S consoles than expected, even as demand continues to exceed supply”. It’s unclear if this better-than-expected console supply will last until Q2, and Phil Spencer has already warned that supply problems will last until 2022.
Microsoft’s total gaming revenue also increased 16 percent, nearly 3.6 billion during a record quarter for Xbox. The data cross shows that Xbox content and services revenue has only increased by 2 percent. Microsoft says there has been a “Growth in Xbox Game Pass subscriptions”But the company has not indicated a new figure for its number of subscribers since last time with 18 million.
The shadows in Microsoft accounts
The least positive side of the results is Surface. We are in the second quarter of sales of Surface Laptop 4 and Surface Pro 7 Plus and the new Surface devices are not yet included in Microsoft’s Surface revenue. Surface revenue is down 17 percent this quarter, Microsoft’s response links it to an exceptional previous year and also to the chip shortage. We will see if it is repeated in another quarter and we are facing a problem.