Leifeng network news, on January 26, Microsoft announced the second fiscal quarter of 2022 financial results. In the second fiscal quarter, Microsoft's revenue was $51.728 billion, compared to $43.076 billion in the same period last year, an increase of 20% year-on-year. Under non-GAAP, Microsoft's net profit for the quarter was $18.765 billion, compared to a net profit of $15.463 billion in the year-ago quarter, up 21% year-over-year.
Among them, Microsoft's three major businesses are developing steadily:
Productivity and business process businesses, including Office, Dynamics, and LinkedIn, revenue of $15.9 billion, up 19% year-over-year;
Smart cloud revenue (including Azure Public Cloud, GitHub and Windows Server) increased 26% year-over-year to $18.3 billion;
The PC/computing business (including C-side products Surface, hardware such as Xbox, gaming business, Bing search, Windows, etc.) generated revenue of $17.5 billion, up 15% year-on-year.
It can be seen that cloud computing has become the main driving force for Microsoft's growth, and the scale and growth rate are more than the other two major businesses.
For a long time, the cloud business and the Office series of products, as the two core pillars of Microsoft's cloud era, have been the biggest focus of Microsoft's quarterly financial reports. But Microsoft's quarterly financial report, the game business actually has a lot of bright spots.
Industry insiders said that after Microsoft's industrial Internet won a steady victory, under the leadership of Nadella, from trying to buy Discord, Pinterest and the American version of Tiktok, to the recent high-premium acquisition of Activision Blizzard, we can see that Microsoft To C's heart is not dead, waiting for the opportunity to return.
Azure cloud business growth slows
At the heart of the "Smart Cloud" business is the Azure cloud platform. According to the earnings report, Microsoft's intelligent cloud division, which includes server products such as Azure Public Cloud, GitHub and Windows Server, generated revenue of $18.33 billion, an increase of 25.5%. Among them, the revenue of Azure and other cloud services increased by 46% year-on-year, a growth rate slightly lower than 50% in the third quarter, which is the first time in the past five quarters that the growth rate has fallen below 50%.
From the financial report data, it can be seen that the current growth rate of Microsoft's cloud computing business has slowed down. Affected by the news, after the release of the earnings report, Microsoft's stock price fell by 2.66% on the day, and even fell nearly 5% at one point in after-hours trading.
Some investors have raised concerns about the peaking rate of growth in the cloud computing business. Some analysts believe that although Azure has a good growth momentum, it still faces fierce competition from Amazon and Google in terms of large contracts.
But Amy Hood, Microsoft's chief financial officer and vice president, said strong growth in Azure subscription service orders and robust business applications will drive Microsoft's cloud revenue up 32 percent year-over-year to $22.1 billion.
On the post-earnings call, Microsoft CEO Nadella mentioned Azure's achievements, saying that Microsoft's digital centers are located in more regions than other cloud service providers, and that The customers of Azure Arc hybrid/multi-cloud solutions are three times the same as they were a year ago.
In addition, in the Microsoft data stack, the transaction volume of the Cosmos DB cloud database solution increased by more than 100% year-on-year; the monthly active users of the office collaboration tool Teams exceeded 270 million; LinkedIn has confirmed 110% year-on-year recruitment; LinkedIn freelancer services have also grown strongly; the devices of the application virtual meeting planning system Teams Rooms have more than doubled year-on-year, and the application equipment of Teams Phone has also grown strongly.
The growth rate of the game business has been growing, which has attracted much attention from the outside world
Cloud computing business growth slowed, but gaming business growth grew strongly. With Microsoft's acquisition of Blizzard, Microsoft's gaming business is gaining widespread attention.
At present, according to agency statistics, Microsoft's gaming business currently accounts for nearly 11% of total revenue. Microsoft's game revenue grew at 8 percent in the second quarter, compared with 2 percent and 4 percent in the first two quarters, with game growth becoming a bright spot in the eyes of investors.
In addition, Xbox Game Pass subscribers currently exceed 25 million, and Xbox content and services revenue is up 10% compared to the same period last year. Up from 2% in the third quarter of last year.
The data shows that a year after Microsoft launched the Xbox Series X and Series S consoles, Xbox hardware revenue grew by 4%. Last quarter, Xbox hardware revenue was even as high as 166%.
After the earnings report, Microsoft CEO Satya Nadella attended the earnings call, saying that as technology's share of global GDP continues to increase, Microsoft is also innovating and investing in a diverse and growing market.
Games are also an important area of our business, in fact, gamers have begun to try these things, including some scenes in Minecraft, we are also working with manufacturers including Hololens to provide players with exciting gaming experiences, whether it is software or hardware, whether it is cloud or chip, these are the areas where we will invest, and our products will be presented in different forms and categories.
The metacosm is the next wave of the Internet industry, just as the first wave of the Internet industry is to let everyone build their own websites, the next wave will also be characterized by openness, users can build their own metaverse space according to their own ideas, whether it is to serve institutions, games, developers, or any other role.
Investments and acquisitions are Microsoft's long-term strategy. For the gaming industry, Microsoft has also maintained a long-term investment interest.
This month, Microsoft announced a $68.7 billion acquisition of game publisher Activision Blizzard, the largest deal in Microsoft's 46-year history. Microsoft bluntly said that the acquisition will "provide the cornerstone for building a metacosm.". The transaction is expected to close in 2023.
Pending regulatory approval, the acquisition will make Microsoft a gaming giant. Activision Blizzard's vast game library, including Call of Duty and World of Warcraft and Overwatch, will also help Microsoft shape the future of the game landscape.
In September 2020, Microsoft announced the acquisition of interactive entertainment company ZeniMax and its game studio Bethesda for $7.5 billion. Microsoft also wanted to buy game chat company Discord for more than $10 billion in 2021, but the acquisition negotiations were later terminated.
Coupled with the acquisition of Blizzard, Microsoft's size in the gaming industry may be second only to Sony and Tencent. In the future, Microsoft may use its massive influx of game assets to further build its Game Pass game service and use Activision Blizzard's intellectual property to build its own version of the virtual world.
Nadella said games are the most dynamic and exciting category of entertainment on all platforms today and will play a key role in the development of metaverse platforms.