Microsoft's fiscal second quarter net profit of $18.8 billion Smart cloud business contributed the most

Tencent Technology News On January 26, on Tuesday, local time in the United States, Microsoft announced its financial report for the second fiscal quarter of 2022 as of December 31, 2021. According to the earnings report, Microsoft's second-quarter revenue was $51.7 billion and net profit was $18.8 billion. These two figures represent 20% and 21% growth, respectively, indicating that the BOOM brought by Microsoft's COVID-19 pandemic is not over. After the earnings report, Microsoft's stock price fell nearly 5% after hours.

The following are the highlights of Microsoft's fiscal second quarter:

Revenue was $51.7 billion, up 20% year-over-year;

Operating income of $22 billion, up 24% year-on-year;

Net profit was US$18.8 billion, up 21% year-on-year;

Earnings per share were $2.48, up 22% year-over-year.

By business

Productivity and business process revenue increased 19 percent to $15.9 billion, with the following key results:

● Benefited from a 19% increase in Office 365 commercial revenue, driving a 14% increase in Office commercial products and cloud services revenue;

Office consumer product and cloud services revenue increased 15%, microsoft 365 consumer users grew to 56.4 million;

Professional social networking site LinkedIn revenue increased by 37% (36% on constant exchange rates);

Dynamics product and cloud services revenue increased 29%, driven by a 45% increase in Dynamics 365 revenue (+44% on constant currency terms).

Revenue from the smart cloud business was US$18.3 billion, up 26% year-on-year, and its main performance was as follows:

Server products and cloud services revenue increased by 29% driven by a 46% increase in revenue from cloud services such as Azure;

Revenue from the PC business increased by 15% to US$17.5 billion, with the following key results:

Windows OEM revenue increased by 25%;

Windows business products and cloud services revenue increased by 13% (+14% in constant currency terms);

Xbox content and services revenue increased by 10%;

Search and news advertising revenue, excluding traffic acquisition costs, grew 32 percent;

● Surface revenue increased by 8%.

Microsoft returned $10.9 billion to shareholders in the second quarter of fiscal 2022 in the form of share repurchases and dividends, an increase of 9% over the second fiscal quarter of fiscal 2021.

Satya Nadella, chairman and CEO of Microsoft, said: "Digital technology is the world's most malleable resource that can overcome constraints and help reshape everyday work and life. As technology continues to account for an increasing share of global GDP, we are reinforcing a shared strategy, culture, and sense of purpose to innovate and invest in diverse and growing markets through a common underlying technology stack and operating model. ”

Amy Hood, Executive Vice President and Chief Financial Officer of Microsoft, commented: "Thanks to Azure's long-term commitment to drive strong growth in bookings, stable commercial execution capabilities have contributed to Microsoft's cloud business revenue reaching $22.1 billion, up 32% year-over-year."

Due to the continued demand from the epidemic, the PC market has just passed another important year, with about 340 million PC shipments in 2021. This is the second quarter of Microsoft's release of Windows 11, and Windows OEM revenue increased 25% year-over-year in the second quarter. Revenue from Windows business products and cloud services also grew 13 percent.

While the PC market is healthier, Microsoft has previously warned that the Surface could take a hit, but that's not the case. Just after Microsoft released the Surface Pro 8 and Surface Laptop Studio in October, surface revenue grew 8 percent in the second fiscal quarter. Microsoft said surface revenue growth was driven by Surface laptops.

According to sources familiar with Microsoft's plans, 2022 is the 10th anniversary of the Launch of the Surface, and Microsoft will launch multiple products this year to celebrate. So far, Microsoft has launched a matte black version of the Surface Go 3, but it has now been almost 1 month since 2022.

Microsoft's Xbox Series X/S consoles have been on the market for more than a year, with hardware revenue up 4 percent, thanks to continued demand for these new consoles. Microsoft's overall gaming revenue also grew 8 percent, with the company setting a record $3.6 billion in the previous fiscal first quarter of fiscal 2022. Xbox content and services revenue also grew 10% year-over-year.

Microsoft also revealed earlier this month that Xbox Game Pass users have grown to 25 million, thanks to the recent release of big games like Halo Unlimited and Forza Forza 5. In 2021, Xbox Game Pass added Bethesda's iconic games to the launch of a total of 20 titles, including Warcraft, Doom, The Elder Scrolls, Fallout, and Wehrmacht Headquarters.

Microsoft is now planning to spend $68.7 billion to acquire Activision Blizzard. The acquisition is expected to close in 2023, when Microsoft will release the Diablo, Overwatch, Call of Duty, and Candy Crush Saga series. Microsoft's huge investment also means that the company has set up a dedicated games division, with Phil Spencer as CEO.

Otherwise, Office has been doing well at Microsoft this quarter. Revenue from Office commerce products and cloud services grew 14 percent, while revenue from Office consumer products increased 15 percent year-over-year. Microsoft 365's consumer users grew to 56.4 million, a staggering 20 percent increase compared to last year. During this time, Microsoft continued to try to entice consumers to use products like Office subscriptions and Microsoft Teams.

Microsoft's server products and cloud services revenue increased 29 percent year-over-year, driven by revenue growth in Azure and other cloud services. Driven by strong advertising demand, LinkedIn's revenue also increased 37% year-over-year. Microsoft said LinkedIn's sessions grew 22 percent to "record engagement." Search and news ad revenue also grew 32% year-over-year due to more ad spend.

On Tuesday, local time in the United States, Microsoft's stock price closed down 2.66% at $288.49 per share. As of this writing, the stock was down nearly 5% in after-hours trading. So far this year, the stock has fallen 13% cumulatively. (Golden Deer)